India's fuel demand recovered last month after slumping to a nine-month low in May, as restrictions to curb the spread of the pandemic were eased and mobility picked up.
Fuel consumption, a proxy for oil demand, rose 8% from May to 16.34 million tonnes, data from the Petroleum Planning and Analysis Cell (PPAC) of the Ministry of Petroleum & Natural Gas showed on Friday.
A second COVID-19 wave, which stalled mobility and dulled economic activity, dragged fuel consumption to its lowest since August in May.
Pandemic infections have, however, eased from May's peak, prompting a 1.5% year-on-year increase in fuel demand last month.
"Going forward we see road fuel demand reaching pre-pandemic levels by the end of the year since the vaccination program has already come a long way," said Rystad analyst Simen Eliassen, adding that jet fuel could also recover by 115,000 bpd.
However, Eliassen cautioned that new coronavirus variants and mutations could pose a risk to the recovery.
A senior government official said on Friday India's devastating second coronavirus wave was not yet over. Concerns over a new Delta Plus COVID-19 variant has also clouded the nation's economic outlook.
Diesel consumption, which accounts for about 40% of India's refined fuel sales, fell 1.6% year on year to 6.20 million tonnes, but rose 12% from May.
Sales of gasoline, or petrol, increased by about 5.7% from the same period last year and jumped 21% from May to 2.41 million tonnes.
Sales of cooking gas, or liquefied petroleum gas (LPG), rose 9.7% to 2.26 million tonnes year-on-year, while naphtha sales dropped by about 3.1% to 1.19 million tonnes.
Sales of bitumen, used for making roads, were down 32% from a year ago, while fuel oil rose 1.9%.
(Reporting by Nakul Iyer; editing by Jason Neely and Krishna Chandra Eluri)
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