Fuel consumption in India jumped 18% in March this year compared to the same period last year, but overall consumption during the 2020-21 financial year fell about 9.1%, according to government data that reflects the unprecedented disruption in economic activity due to the Covid-19 pandemic.
However, the data for March from both years—this year, 18.77 million tonne of fuel was consumed compared to 15.93 in 2020—now add to several metrics that reflect a robust recovery in the economy.
The country’s annual consumption of petroleum products in 2020-21 was 194.63 million tonne, compared to 214.13 million tonne in 2019-20, according to the oil ministry’s data keeper, the Petroleum Planning and Analysis Cell (PPAC).
Last year’s contraction was the first time since the PPAC began recording the data starting 1998-99. “The data show that India’s economy is recovering quickly from the devastating impact of pandemic and the recovery is in lines with other indicators, such as GDP [gross domestic product], GST [Goods and Services Tax] collections and direct tax receipts,” a government official with direct knowledge of the matter said, asking not to be named.
India’s economy shrank by 24.4% in the first quarter of 2020-21 and 7.3% in the next quarter, before expanding by 0.4% in the three months ended December 31.
{{/usCountry}}India’s economy shrank by 24.4% in the first quarter of 2020-21 and 7.3% in the next quarter, before expanding by 0.4% in the three months ended December 31.
{{/usCountry}}Data released on Friday pegged direct tax collection in 2020-21 at ₹9.45 lakh crore, which is 4.4% higher than the revised estimate (RE). Similarly, GST receipts in March was at an all-time high of ₹1.24 lakh crore with the indirect tax collections exceeded the ₹1 lakh crore benchmark for the sixth consecutive month.
But the official added a fresh wave of infections, which is expanding at a faster pace than the first one, could be a threat. “There is a threat of second wave of pandemic that may see some curbs in movements and lockdown in certain areas. It may pull down fuel consumption in near future, but the fuel demand in month of March 2021 was comparable to any other month of pre-Covid era and better than the average 17.84 million tonnes monthly consumption in 2019-20,” the official quoted above said.
“Fuel consumption was hit in 2020-21 because of lockdown... Demand of fuel will return the sustained growth path only after Covid-19 pandemic is tamed,” chartered accountant Vijay Kumar Gupta said.