Gasoline sales in India, the world’s biggest market for motorcycles and scooters, collapsed to the lowest level in a year as a devastating second wave of Covid-19 infections savaged consumption.
Average daily sales in May declined by almost a fifth from the previous month as strict stay-at-home orders across large parts of the country crippled demand, according to people familiar with preliminary data from the country’s three biggest retailers. Overall, monthly sales were the lowest since May 2020.
Oil demand across wide swathes of Asia has been hurt by resurgent coronavirus waves in recent months, clouding a generally positive global picture as sales in the U.S. and Europe pick up. The outbreak in India was particularly severe as hospitals were overwhelmed and many local administrations reinstated movement curbs. Despite the uneven pattern, crude prices have rallied, with global benchmark Brent set for the highest close in two years on Tuesday.
Sales of diesel, which account for more than half of oil consumption in India, were about 20% lower than April, and 30% weaker than the same period in 2019.
The plunging demand forced Indian refiners to ship more fuels out, with exports hitting a 13-month high in May, according to Vortexa Ltd. But that cushion of overseas sales is gone too due to weakness in regional product cracks, and exports are likely to be cut back in June, according to Serena Huang, lead market analyst at the firm.
The crisis in India has begun to ease, with daily infections falling back below 150,000, prompting some states to start relaxing local curbs. Last time around, gasoline sales were the fastest to recover from the lockdown’s impact as more people favored private cars and motorbikes over public transport.
Spokespeople for Indian Oil Corp., Bharat Petroleum Corp., and Hindustan Petroleum Corp., declined to comment. The three retailers account for more than 90% of the nation’s fuel sales.