India’s diesel demand has seen a significant decline in the month of June due to extreme heat conditions in certain regions, leading to a decrease in travel activities. According to data released by state-owned firms, diesel sales dropped by 3.9% to 3.95 million tonnes during the first half of June compared to the same period last year.

The trend of decreasing demand for diesel has been observed over the past few months, with a 2.3% decline in April, 2.7% in March, and 1.1% in May. Despite this, petrol sales from three major state-owned firms remained relatively stable at 1.42 million tonnes in the first half of June, with a minor month-on-month decrease of 4.6%.

The overall consumption of fuel has been on a downward trajectory, contrary to the usual surge seen during election periods. Factors like the summer harvest season and high temperatures, which typically boost air conditioning usage in vehicles, were expected to drive fuel consumption up. However, this year has seen a deviation from this anticipated trend.

Even with a reduction of Rs 2 per litre in petrol and diesel prices in mid-March, there was no significant increase in sales for oil companies. Month-on-month petrol sales dropped by 3.6% compared to May figures, while diesel demand remained steady at 3.54 million tonnes in the first half of May.

Diesel, accounting for nearly 40% of all petroleum product consumption in India, is predominantly used in the transportation sector (70% of sales) and plays a vital role in the agricultural sector, powering harvesters and tractors. Jet fuel (ATF) sales, on the other hand, saw a 2.3% year-on-year increase in June, although there was a 4.5% decline compared to May.

The decline in diesel demand amidst soaring temperatures underscores the impact of weather conditions on fuel consumption patterns in India, with implications for various sectors dependent on these fuels.