Tuesday, 23 May 2017

India's POL demand falls for the second month in February: Demonetization at work?

India’s demand for fuel consecutively for the second month in a row, dropped by -2.8% in February this year. The demand for all oil products dropped to 15.8 MMT from 16.3 MMT a year ago. On cumulative basis, a growth of 6.0% was registered for the period April 2016 - February 2017. Except for LPG, Naphtha, MS, LDO, ATF and ‘other’ products which recorded a positive growth all other products recorded a negative growth. 


However, SKO registered a major de-growth of -33.8 % during the month and -20.4% on cumulative basis, mainly because of reduced allocation to states and voluntary surrender of PDS SKO quota by some states. February 2016 was a leap year and hence this year the current month has one day less resulting in lower consumption. Interestingly enough, an official government report blamed demonetization for the slowdown in demand.

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