Momentum for oil sales boom has been building for some time and FY22 has started off on a high note for the oil marketing companies. Petroleum consumption in the country is rising continuously and August 2021 volumes for sales made by the OMCs depict the continuation of the upsurge. While it was thought that August sales will be dented due to new Covid restrictions in the country as Delta variant spread, volumes continued to surge.
Despite a month-on-month decline of 9 percent for Motor Gasoline, petrol sales continue to touch record high levels. Petrol sales in August 2021 increased by 6 percent year-on-year. Contribution from High-Speed Diesel also supported the overall petroleum despite witnessing a month-on-month decline of around 7 percent. HSD sales increased by 32 percent year-on-year in August 2021. Furnace oil has been a recent growth driver of petroleum sales; FO sales in August 2021 were up by 38 and 63 percent, month-on-month, and year-on-year respectively. Overall, petroleum consumption stood at 1.96 million tons in August 2021, up by 26 percent year-on-year.
Overall petroleum sales in 2MFY22 were seen climbing by 21 percent where most of the growth was attributable to double digit growth seen in furnace oil and diesel. Petrol sales have been on an upward trajectory too. The reasons for spiking petroleum consumption includes the skyrocketing car and automobile sales, two-wheeler sales, as well as increased industrial activity, LSM and exports; rise in domestic tourism; and restriction on Iranian petrol, all of which are pushing up petrol sales. In addition, kharif crop season; and higher demand from FO based power plants due to rising LNG prices are also pushing up petroleum sales.