The sales of petroleum products by the oil marketing segment saw some respite in November 2019 as the official data shows that all three key petroleum products: Furnace oil, high speed diesel, and motor gasoline witnessed growth in volumes on a year-on-year basis. Furnace oil volumes grew by 21 percent, while HSD and MS volumes increased by 7 and 11 percent year-on-year, respectively.

Amid falling volumes, the November growth is being touted as a recovery or reversal in the trend. But the fact is that this volumetric growth does not foretell any turnaround. A look at key fuels show that increase in furnace oil volumes in November 2019 was largely driven by the consumption of the black oil as a power generation source as prices of the fuel dropped in November. However, this growth is only short lived and will be eaten away by LNG and new capacities on coal coming online soon. Also as hydropower generation falls in winter months post the monsoon season, growth is diverted to other fuels and FO growth could have been that case. However, month-on-month growth in furnace oil sales show that its consumption dropped by 28 percent in November 2019, which also goes on to show that no turnaround for FO is around the corner.

High speed diesel grew by 7 percent year-on-year, and the key factor behind this growth has been the low base effect in November 2018. HSD too declined month-on-month as higher prices, availability of smuggled fuel and no significant change in the transport/agri and industrial activity has been witnessed to spur diesels growth.

Motor gasoline or petrol, which has been trying to remain resilient, grew by 4 percent year-on-year in November 2019; but fuel too witnessed a significant decline of 15 percent on month-on-month, which comes on the back of increased prices.

Moreover, 5MFY20 figures depict the same old ongoing trend where FO and HSD continued to decline by 13 and 10 percent year-on-year, respectively; and MS increased by 5 percent, year-on-year.