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Tuesday, October 20, 2020

Hints of economic activity revival in May as fuel consumption rises

In April, consumption of fuel was down to just 40 per cent of the February numbers.

Written by Krishn Kaushik | New Delhi | June 12, 2020 1:08:11 am
coronavirus, coronavirus latest news, lockdown, lockdown india, india news, coronavirus news, covid 19 india, coronavirus live news, corona news, corona latest news, india coronavirus, coronavirus live news, coronavirus latest On a highway in Mumbai on Thursday. (Reuters/Francis Mascarenhas)

In a sign of some revival of economic activity, fuel consumption — diesel, petrol and aviation fuel — across the country grew by over 70 per cent in May, compared to the consumption in April. However, at about 70 per cent of the February figures, consumption was still considerably below the mark before the Covid-19 pandemic spread, and lockdown was imposed on March 25.

In April, consumption of fuel was down to just 40 per cent of the February numbers.

Even though aviation fuel saw the highest spike, doubling in May compared to April, it still saw the least amount of revival between the three fuels when seen against February numbers. While petrol and diesel consumption was back to 75 per cent of February numbers, aviation fuel consumption in May was just 16 per cent when compared to February.

The government had allowed offices to open and public movement within green and orange zones starting May 5, and then later even in red zones (barring containment zones) on May 17, it only allowed inter-state road movement on June 1. Goods movement within and across states had been opened in end-March itself.

Restrictions on commercial passenger flights were retained until May 25, when the government allowed traffic on select domestic routes.

Consumption data from the Petroleum Planning and Analysis Cell (PPAC), under the Union Petroleum and Natural Gas Ministry, shows that motor spirit (petrol) consumption rose from 973 thousand metric tonnes (MT) in April to 1,769 thousand MT in May — a jump of 82 per cent. Similarly, consumption of high-speed diesel (diesel) saw a spike from 3,250 thousand MT in April to 5,495 thousand MT in May (a 70% jump).

Compared to February, when 2,511 thousand MT petrol and 7,160 thousand MT diesel were consumed, the May figures were 70% and 77% of that.

Aviation turbine fuel (ATF) consumption, which had seen the most severe dip during the lockdown period, jumped from 56 thousand MT in April to 111 thousand MT last month, but consumption in May was still just about a sixth of the 690 thousand MT consumed in February.

Put together, the three fuels — used in most private and commercial, passenger and goods vehicles, aircraft, and generators — saw 7,375 thousand MT consumed in the country in May. That is nearly double of 4,279 thousand MT consumed in April, but much less than February figures of 10,361 thousand MT.

The revival of movement of commercial vehicles is also visible in the number of e-way bills issued, as per GST Network data. The numbers tripled from 86 lakh in April to 2.55 crore in May, although still just 45 per cent of 5.72 crore e-way bills issued in February. This includes e-way bills within and across states.

This means that for nearly 19.72 lakh e-way bills generated every day in February, the daily numbers were down to 2.87 lakh in April, and revived to 8.22 lakh in May.

Data shows that inter-state movement of goods continues to remain more affected than within a state. As several states continued to keep their borders closed for interstate passenger travel, even after the Centre’s March 29 order that goods movement should not be stopped, the revival in e-way bills generated reflects these restrictions. E-way bills generated in May for intra-state goods movement (1.71 crore) were 51% of February (3.35 crore); for inter-state goods movement, the May figure (84 lakh) is just 35% of February (2.37 crore).

One reason for a significant dip in generation of e-way bills was also the Centre’s decision to extend validity of all e-way bills issued before March 24 until May 31. Usually each e-way bill is valid for a day for 100-km stretch of a journey.

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