State retailers' gasoline and gasoil sales in April fell by 61 per cent and 57 per cent from a year earlier, though declines eased slightly later in the month when some transportation and industrial activity resumed.
The government last week extended the lockdown until May 17, with some relaxations in lower-risk areas, although travel by air, rail and metro and inter-state movement of people by road was still banned.
The International Energy Agency (IEA) in its latest report said India's annual fuel consumption will decline 5.6 per cent in 2020 compared with growth of 2.4 per cent forecast in its March report.
Consumption of diesel, which is widely used for transportation as well as for irrigation needs in India, was down about 55.6 per cent year-over-year at 3.25 million tonnes. Cooking gas or liquefied petroleum gas (LPG) sales rose about 12.1 per cent to 2.13 million tonnes, while naphtha sales fell 9.5 per cent to 0.86 million tonnes.
State companies Indian Oil Corp , Hindustan Petroleum Corp and Bharat Petroleum own about 90 per cent of the retail fuel outlets in the country.
State-retailers sold 21 per cent more LPG in the first fortnight of April from a year earlier. India is providing free cooking gas cylinders to the poor for three months to June to help them weather the impact of the lockdown. Sales of bitumen, used for making roads, slumped 71 per cent, while fuel oil use dipped 40 per cent in April.
However, the country's fuel demand is set to recover with easing restrictions on industrial activity and transport in areas that have contained the spread of coronavirus, oil minister Dharmendra Pradhan said earlier this week.
"More thing will come up in near future and looking at all such things I am expecting a demand growth," Pradhan said. "We will not face major problems to maintain our targets that we had decided in the beginning of the financial year 2020-21."
Pradhan said the slump in global oil prices, together with with falling fuel demand, would lead to inventory losses for refiners. Refiners had to defer some oil cargoes due to the fall in local demand, he added.
India's overall refined fuel demand includes consumption of fuel oil, bitumen and liquefied petroleum gas (LPG). Jet fuel sales in April declined by about 92 per cent, the provisional industry data showed.