In some good news for diesel vehicle owners in India, domestic diesel sales had gone down by 2 percent in the month of February 2013. This was the first dip since May 2009 and the hike in prices, along with improved electricity supplies managed to keep demand under control.
The decline in diesel rates resulted in the fall of the overall local fuel sales by 1.5 percent in the month of February 2013, as compared to a year ago. This was the first decline since September 2010. The oil product sales, which are a proxy for oil demand in India had reached a total of 12.25 million tonnes in February.
The figure was lower, as compared to 12.44 million tonnes a year ago. The figures were revealed according to data from the petroleum planning analysis cell of the oil ministry. The consumption of diesel makes up for 40 percent of local fuel sales, which fell to 5.39 million tonnes. Moreover, India had also removed subsidies from diesel, which was sold to bulk buyers in the month of January.
The Indian government also allowed state fuel retailers to raise prices by up to 0.50 rupees (or one US cent) per liter every month. This helped rates to be gradually aligned with market rates. In recent times, the consumption of gasoline has increased by 3.1 percent on an annual basis.