Monsoon Rains Dampen India's July Fuel Demand

Gasoline and gasoil sales by Indian state refiners in July fell from a month earlier as monsoon rains restricted mobility and construction work while high inflation curtailed overall demand for goods, preliminary sales data shows.

Fuel demand in India, the world's third biggest oil importer and consumer, typically falls during the four-month monsoon season beginning in June as parts of the country are hit by heavy floods.

Gasoil demand in July fell by about 16 per cent to 6.42 million tonnes while gasoline demand fell by about 8 per cent to 2.66 million tonnes, the data showed.

"Monsoon rains along with high inflation had hit truck mobility and demand for goods in the country. Truck mobility was down by about 15-20 per cent in July," said S.P. Singh, senior fellow at the Indian Foundation for Transport Research and Training.

Monsoon rains also affected demand from the agriculture sector as farmers use gasoil-fired gensets for irrigation.

Gasoil accounts for about two-fifths of India's overall refined fuel consumption and is directly linked to industrial activity in Asia's third-largest economy.

State retailers Indian Oil Corp, Hindustan Petroleum Corp and Bharat Petroleum Corp Ltd own about 90 per cent of the country's retail fuel outlets.

(Reuters)