The ongoing monsoon season in India has put pressure on transportation fuel consumption in the country. In July, gasoline consumption was down by 5%, m-o-m and gasoil consumption was down by 13%, m-o-m. Nevertheless, this is a usual pattern for every year. Heavy rainfall hit vehicle movement (be it for personal usage or goods transportation) and thereby reduce fuel consumption. Moreover, weak mining/construction activity along with muted gasoil demand from agriculture sector has also put pressure on fuel consumption in recent times. As many parts of India still continue to receive heavy rainfall, transportation fuel demand will remain under pressure in the near-term. It’s only around Diwali festival season, we believe demand should begin to strengthen.
