Fuel demand is beginning to flatline after showing signs of returning to life, as consumption dipped 11.7% in July, official data showed.

Fuel consumption, a barometer of economic activity, had slumped by over 45% in April as a nationwide lockdown halted most vehicular traffic and shut industries. However, with the easing of restrictions, demand picked up in May and June with a month-on-month increase in consumption numbers.

However, mini-lockdowns imposed by States to contain the spread of COVID-19 seemed to have stopped this recovery, with fuel demand falling 3.5% in July over June.

Demand fell to 15.67 million tonnes (mt) in July compared with 17.75 mt a year earlier, and 3.5% lower than the June sales of 16.24 mt.

Consumption of diesel, which accounts for about two-fifths of India’s fuel usage and is the most used fuel for transportation and irrigation, fell 19.2% to 5.52 mt in July, data from the Petroleum Planning and Analysis Cell of the Oil ministry showed. Diesel usage in July was lower than 6.3 mt consumption in June.

Petrol demand fell 10.3% from a year earlier to 2.26 mt, and by 0.8% from June.

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