New Delhi, Oct 17 (TIWN) The oil sector seems to be latest addition to the list of sectors facing stress due to the ongoing economic slowdown. For the first time in many months, both oil demand and imports have witnessed a sharp fall indicating that poor health of the economy has now begun impacting a sector where the country relies a lot on imports.

As per latest the Oil Ministry data, petroleum products demand in India has slipped to its two-year low level in September at 105.7 million tones. The fall is largely on account of a consistent fall witnessed in the consumption of auto fuels – petrol and diesel. Both fuels have reached their lowest consumption level in September with consumption of petrol and diesel falling to 2.3 and 5.8 million tonnes level respectively in September. The consumption of the two products have fallen in each of the months in current financial year indicating the slowdown is taking its toll in the oil sector as well.

What is worse is that consumption fall has also resulted in slowing down of oil imports that have fallen by 0.5 per cent during April-August 2019 from a level of 94.9 million tonnes (MT) in FY19 to 94.4 MT in the five-month period of the current fiscal. While a slowdown in oil imports should be welcomed in a country that spends its foreign exchange to but crude oil, it is reflective of poor demand scenario that has slowed oil imports by refineries.

The refineries are using their inventories for meeting domestic supplies of petroleum products rather than buying additional quantities of crude oil from overseas even though buying at this juncture would be beneficial with international crude prices at a low of $58.9 a barrel.