Economic News

Covid-19 lockdown and taxes eat away at diesel’s edge over petrol in India

By Administrator_ India

Capital Sands

For decades, diesel has underpinned India’s economic growth and the fortunes of its refiners, but the pandemic has caused the nation’s most consumed fuel to lose some of its luster.

Since Covid-19-lockdowns have eased across India, diesel consumption has trailed the rebound in gasoline with trucks remaining idle amid a softer economy. Motor fuel use, however, has benefited from people choosing their own cars and scooters over public transport to avoid the risk of infection.

While diesel is still king in India — fuel sales are double that of gasoline — the uneven demand recovery has created a unique challenge for India’s refiners, just as more headwinds emerge from the use of hydrogen and natural gas in major guzzlers such as trucks and buses.

“Personal mobility over public transport has supported gasoline, but diesel is getting knocked-out across the sectors,” said Senthil Kumaran, head of south Asia oil at industry consultant FGE. “It’s a structural shift in trends that we are witnessing. The refining system is caught at the crossroads, but it will gradually adjust to the change.”

Refiners are expected to focus on making less diesel and more gasoline and petrochemicals to respond to changing demand. Reliance Industries Ltd. has flagged a shift away from transport fuels, while Indian Oil Corp. has signaled greater diversification to reduce its dependence on its fuels business. The country’s biggest processor also plans to roll out a fleet of buses powered by a blend of hydrogen and compressed natural gas.

Indian Oil Corp.’s foray into hydrogen-powered public transport follows a push by the government encouraging the use of cleaner fuels for buses and trucks, which consume more than half of the nation’s diesel. The railway that moves millions of people a day around the country is also getting somewhat greener, with the country seeking to convert its entire network to run on electricity by 2024, rather than diesel, according to railways minister Piyush Goyal.

Related posts
Economic News

Dow Futures Little Changed, Chegg Tanks 21.5% After Earnings

U.S. stock futures were trading in a tight range during Monday’s evening deals, after major…
Read more
Economic News

Taiwan Exports Seen Contracting For Fifth Straight Month in January: Reuters Poll

Taiwan’s exports in January likely fell for the fifth month in a row amid fears of a global…
Read more
Economic News

China Hotel, Catering Job Openings Surge On PAost-COVID Demand Recovery - Survey

Chinese hotels and restaurants are seeking employees amid demand recovery in the services sector…
Read more
Newsletter
Become a Trendsetter
Sign up for Davenport’s Daily Digest and get the best of Davenport, tailored for you. [mc4wp_form id="729"]

Leave a Reply

Your email address will not be published. Required fields are marked *