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Petro products' consumption continues to fall

Our Bureau

MUMBAI, Sept. 26

THE slump in consumption of petroleum products continues this month with overall growth rates registering a negative 3.2 per cent growth rate for August 2001.

Diesel consumption, considered an indicator of economic growth has slumped to a negative 5.2 per cent this month against a negative 1.9 per cent in August last year.

Some industry analysts expect the picture to improve marginally in the second half of the fiscal.

``The agricultural sector is faring better this year compared to the last couple of years, with most parts of the country registering better monsoons,'' said a senior analyst. This, analysts hope, will provide an overall boost to diesel consumption and i n turn to the economy.

``If diesel registers a growth rate of negative three per cent by the end of this fiscal, we could hope for an overall growth rate of 1-1.5 per cent,'' said an analyst.

Most petroleum products including naphtha and kerosene have seen a fall in growth over the last couple of months. In August growth rates for both the products stood at -7.7 per cent (1.3 per cent) and -6.4 per cent (1.3 per cent).

Petrol and liquefied petroleum gas (LPG) have registered positive growth rates but these have been on a consistent decline. Last month, the growth figures slid to 5.5 per cent (17 per cent) and 10.3 per cent (20.6 per cent).

Furnace oil and Low Sulphur Heavy Stock (LSHS) are the only products to register health growth. According to industry analysts, this could be attributed to the price sensitive nature of the projects.

``Most industries using FO and LSHS as fuel or feedstock switch to other options once prices move up. Crashing prices have only boosted consumption by industries such as power and petrochemicals,'' an analyst said.

The slump in the automotive sector has affected sales of lubricants and greases which have registered negative 16 per cent growth.