Petroleum consumption is coming down this year amid surging prices, nose-diving currency and economic hardships that has led to lower productivity, and economic activity. The downward streak in the petroleum consumption continues in February 2023 as sales by the oil marketing companies fall by 21 percent year-on-year. The decline in petroleum sales for the OMCs was led by decline in furnace oil sales followed by high speed diesel and motor spirit. Furnace oil posted a decline of 47 percent for volumes sold in Feb-23 year-on-year, while diesel volumes were down by 19 percent year-on-year. Motor spirit consumption was weaker by 15 percent year-on-year.The decline has been led by economic slowdown and weaker LSM activity, declining automobile sales and rising ex-depot prices stoking inflationary pressure.

The month-on-month sales also show a decline in OMC sales by 16 percent in Feb-23The primary factors behind the fall in volumes in the month were the seasonal decline in the month of February due to lesser number of days in the month; higher prices of retail products than the previous month; and lower demand of furnace oil by the power sector for power generation.

The OMC data by the OCAC shows that sales of petroleum products by the oil marketing companies in 8MFY23 fell by 19 percent year-on-year. Product wise, the furnace oil, diesel and petrol were down in double digits by 29 percent, 22 percent and 15 percent year-on-year, respectively. This shows that the ongoing fiscal year is going to be one of the weakest in the recent past. Petrol sales in Feb-23 have been the lowest since at least Jan-21; and so has been the case with the furnace oil. With rising prices and the recent bout of currency devaluation in the last few days, OMC sales in March are expected remain under duress.