India's fuel consumption surged in May with diesel sales scaling a record high, buoyed by strong factory activity in the third-largest oil consumer in the world.
Last month, India's factory output increased at the fastest rate since October 2020, while competitors in the area including China, Japan, and South Korea were experiencing prolonged manufacturing difficulties.
Sales of diesel, mainly used by trucks and commercially run passenger vehicles, increased around 5.1% in May to an all-time high of 8.22 million tonnes from a month earlier, as per PPAC data going back until 1998.
Viktor Katona, lead crude analyst at Kpler, said increased manufacturing increased purchasing activity and increased trucking demand. He also noted that agricultural, notably rice and wheat farming, which were largely harvested in April and May, also helped to enhance diesel demand.
India's delayed monsoons also supported diesel consumption by translating into better construction activity overall, Katona said. Fuel consumption, a proxy for oil demand, totalled 20.03 million tonnes in May, up from 18.54 million tonnes in April.
Sales of gasoline, or petrol, were 16% higher than the previous month at 3.35 million tonnes. The data revealed that sales of cooking gas, or liquefied petroleum gas (LPG), jumped 9.3% to 2.35 million tonnes and that sales of naphtha increased 6.5% to 1.15 million tonnes.