Govt cuts fuel demand forecast

New Delhi, Jan. 25: The government has trimmed the fuel demand forecast for the current fiscal by one per cent to 155.6 million tonnes, with the cap on subsidised kitchen gas having an impact.

The demand is expected to grow at 5.2 per cent compared with 5 per cent in the previous fiscal, when India consumed 148.13 million tonnes of fuel, according to data released by the petroleum planning and analysis cell (PPAC), a unit of the oil ministry.

The PPAC had earlier projected that the country would consume 157.07 million tonnes of refined oil products this fiscal year, a growth of 6.1 per cent over 2011-12.

The oil ministry's cell, in a mid-term review, has halved its growth projection for the demand of liquefied petroleum gas (LPG) this fiscal to 5.6 per cent as the use of the fuel has decreased after the government capped the sale of subsidised cooking gas cylinders to six per household in September. This ceiling, however, has been increased to nine from April 1, which could push up the demand next fiscal.

The demand for diesel is set to rise 8.3 per cent compared with a previous projection of 5.9 per cent as it is considerably cheaper than petrol. The demand for petrol is projected to grow 5.5 per cent at 15.82 million tonnes, while kerosene is expected to see a 9.5 per cent drop in consumption to 7.45 million tonnes.

Aviation turbine fuel, too, is projected to see a fall in demand of 7.2 per cent at 5.13 million tonnes.

Naphtha consumption, however, is projected to grow 7.6 per cent to 11.95 million tonnes.

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