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The economic slowdown caused a jolt to industrial growth

Saturday - October 19, 2019 2:28 pm , Category : BUSINESS
Fuel demand reached two years’ low level
Fuel demand reached two years’ low level

Know what the declining of fuel demand indicates?

OCT 19 (WTN) - As you know that the global economic slowdown is affecting the economies of the world. According to the International Monetary Fund, 90 per cent of the world's economies are prone to recession. Talk about India, the economy of a fast developing country is facing the recession affect the most. Many financial institutions of the world, including the World Bank and IMF, have revised down the GDP growth rate of India in the current financial year.

Signs of the economic downturn in the Indian economy had started showing in the last one year when the automobile sector was witnessing a slowdown. For the last year, there has been a significant decline in the sale of vehicles in the country. The economic recession in the country is now directly impacting industrial demand. The consumption of petrol and LPG is also seen slackening due to reduced consumption of diesel and industrial fuel. For your information, let us know that due to both these reasons, fuel demand in the country has come down to the lowest level of two years in the month of September.

According to data from Petroleum Planning and Analysis Cell (PPAC), consumption of petroleum products declined to 1660 million tonnes in September 2019. For your information, let us know that this figure of demand for petroleum products has been the lowest since July 2017. At the same time, in the year 2018, the consumption of petroleum products in India was 1.606 million tonnes.

Talk about diesel, which is the most used in India, the demand for diesel in India during this period decreased by 3.2 per cent to 5.8 million tons. At the same time, sales of naphtha dropped by 25 per cent to 8.44 lakh tonnes. There has also been a decline in the consumption of bitumen used in road construction. For your information, let us know that during this period the consumption of bitumen has decreased by 7.3 per cent to 3.43 lakh tons, while the sale of fuel oil has come down by 3.8 per cent to 5.25 lakh tons.

Clearly, the sluggish sales of petroleum products have also affected the sluggish growth in demand for LPG and petrol. According to the data, petrol sales grew by only 6.2 per cent to 23.7 lakh tonnes, while aircraft fuel (ATF) sales fell by 1.6 per cent to 6.66 lakh tonnes.

Talking about LPG so the consumption of LPG in India has increased by 6 per cent to 21.8 lakh tonnes. The reason for the increase in LPG consumption is the 'Ujjwala Scheme' run by the Modi Government. As you know, the Modi Government is promoting the use of LPG instead of wood-staple for cooking. Using LPG protects the health of women while cooking and reduces pollution. Talking about kerosene so the demand for kerosene dropped by about 38 per cent to 1.76 lakh tonnes during this period. It is being said that a major reason for the decrease in the demand for kerosene is the 'Ujjwala Scheme'.

Due to the economic downturn, international rating agency Fitch Solutions has reduced its estimate of India's oil demand. According to experts, this is increasing the possibility of further deterioration in the country's economy and decreasing growth rate. Fitch has lowered its estimate of average growth in fuel demand to 3.8 per cent by 4.6 per cent by 2021. That is, it is clear that due to the fall in India's oil demand in the country, it will have a negative impact on the industrial growth rate of the country in the coming times and if this happens, the country's growth rate may be even lower.