India's May fuel use inches up on month on strong industrial activity

India's fuel consumption in May increased due to strong industrial activity and elections, as per data from the PPAC. The country's oil demand and consumption trends are reflected in the data provided by the PPAC.

India's fuel consumption edged higher in May from the previous month, data from the Petroleum Planning and Analysis Cell (PPAC) of the oil ministry showed on Friday, as strong industrial activity and general elections boosted fuel demand in Asia's third-largest economy.

Latest from the Election Surpirse Lok Sabha Elections: Track all the political movements Live The fine print of Das & Co's first post poll policy Shah, Nadda hash out deals with allies as Jun 9 looms WHY IS IT IMPORTANT? India is the world's third-biggest oil importer and consumer.

The data is a proxy for the country's oil demand.

BY THE NUMBERS Total consumption totalled 20.49 million metric tons (4.84 million barrels per day) in May, slightly down from 20.69 million tons last year, data showed.

Demand rose 3.2% on a monthly basis from the 19.86 million tons consumed in April.

Sales of diesel , mainly used by trucks and commercially run passenger vehicles, rose by 1.8% year-on-year to 8.37 million tons in May. Sales of gasoline in May rose 2.4% from the previous year to 3.43 million tons.

Demand for bitumen, used for making roads, fell by 5.6% annually.

Cooking gas, or liquefied petroleum gas sales rose by 2% to 2.39 million tons, while naphtha sales fell by 8% to 1.07 million tons, compared with last May, the data showed.

Fuel oil use decreased by more than 11% year-on-year in May. KEY QUOTE "Election campaigning results in more travel, which could be a factor in oil demand increase in May," said LSEG analyst Ehsan Ul Haq. "Strong economic growth is fuelling oil demand growth in India," said Ul Haq, who expects it continue under Prime Minister Narendra Modi.

CONTEXT India's economy grew at a faster-than-expected pace of 7.8% year-on-year in the January-March quarter, helped by strong growth in the manufacturing sector, and economists expect the momentum to remain strong this year.

India's monsoon rains have advanced into the western state of Maharashtra after covering almost all of the southern region, two senior weather officials told Reuters.

Summer rains, critical to spur economic growth begin in the south around June 1 before spreading nationwide by mid-July.

Sweltering heat and policy measures are fuelling a surge in the use of gas-fired power in India, with imports of liquefied natural gas (LNG) forecast to rise sharply over the next two years, industry officials and experts say. Asia's imports of crude oil rose to the highest in 12 months in May, with the strength being driven by India as the region's second-biggest buyer is on track to see record arrivals.

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