Gasoline and diesel demand in the world’s third-largest oil importer, India, crashed by around 60 percent annually in April due to the nationwide lockdown to curb the spread of the coronavirus, two industry sources told Reuters on Monday.
India – with a population of 1.3 billion people – went into a nationwide lockdown at the end of March. The lockdown has since been extended to the middle of May.
In April, gasoline and diesel sales in India collapsed by 61 percent and 57 percent on the year, respectively, provisional industry data provided to Reuters by the sources showed. At the beginning of April, the demand crash was more pronounced, with gasoline sales down 61 percent and diesel sales crashing by 64 percent in the first half of the month.
Due to the lockdown and to India’s struggles to contain the spread of the coronavirus, fuel demand is plummeting, so refineries are cutting run rates and struggling to store crude and refined products in the dwindling available storage capacity.
Last month, Indian Oil Corp (IOC), the country’s biggest refiner and fuel retailer, was said to have declared a force majeure on oil imports from some of its top oil suppliers, including Saudi Arabia.
Due to plummeting fuel demand and overflowing storage capacity, at least three oil refiners in India have asked for lower crude oil imports for May from the Middle East, including from the world’s top exporter, Saudi Arabia, officials at the refiners told Reuters last month.
With demand collapsing, India’s oil refiners have already filled 95 percent of their combined storage capacity for fuel of 85 million barrels, officials at three state oil refiners told Bloomberg at the end of April. Even the tanks at the 66,000 fuel stations in India are full, as more than a billion people are under lockdown.
In the first two weeks of April, India’s consumption of gasoline and diesel—more than half of the country’s oil demand—crashed by over 60 percent, according to Bloomberg estimates.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.