As per the data with the Petroleum Planning and Analysis Cell (PPAC) of the Union Ministry of Petroleum and Natural Gas, consumption of diesel continues to grow at a faster pace than other petroleum products despite the regular hike in diesel prices. Diesel consumption grew by 4.2 per cent year-on-year (y-o-y) in April to 6.2 million tonne.
Than other petroleum products, the growth in diesel consumption was faster. The overall consumption of petroleum products increased 3.1 per cent y-o-y in April, PPAC data showed. Diesel demand, which dropped in February following the partial de-control in prices, has remained robust in the following months. Oil marketing companies (OMCs) have raised diesel prices five times since the partial de-control in January.
Diesel prices have gone up by Rs 8.5 per litre since August 2012. The high proportion of diesel cars in total passenger cars, improvement in sales of commercial vehicles in April and the high power deficit across the country have resulted in an increase in demand for diesel, observers said.
The under-recovery on diesel is the highest among petroleum products and stood at Rs 3.73 per litre as on May 16. Under-recovery or the difference between the purchase price of crude oil and the retail price at which petroleum products are sold touched Rs 92,061 crore for diesel in 2012-13.
The total under-recoveries for petroleum products reached a record high Rs 1.61 lakh crore for the period.