Indian state refiners` petrol and diesel sales declined in the first half of July from the same period last month, according to preliminary data, as a renewed lockdown in parts of the country and rising retail prices hit demand. India on Friday became the third country in the world to record more than one million cases of the new coronavirus, behind only the United States and Brazil, as infections spread further into the countryside and smaller towns. Fuel demand growth in India, the world`s third-biggest oil importer and consumer, plunged to historic lows in April when the federal government imposed a country-wide lockdown.

State-refiners` diesel sales, which account for two-fifth of overall refined fuel sales in India, fell by 18% to 2.2 million tonnes in the first half of July from the same period in June, and by about 21% from a year earlier, according to data compiled by Indian Oil Corp. State companies - Indian Oil Corp, Hindustan Petroleum Corp and Bharat Petroleum - own about 90% of India`s retail fuel outlets.

Indian fuel demand had gathered pace from May when the lockdown was partly eased. But a spike in cases of coronavirus infection has led to authorities imposing fresh lockdowns and designating new containment zones in several states this week, including the largely rural Bihar in the east and the southern tech hub Bengaluru. State companies` sales of petrol fell 6.7% to 880,000 tonnes in the first half of July from the same period in June, and by about 12% from a year earlier, the data showed.

"Retail sales are down because of reimposed lockdown and higher retail prices," said Sri Paravaikkarasu, director for Asia oil at consultancy FGE. India`s diesel price has touched a record high of 81.35 rupees ($1.09) a liter on Friday in New Delhi, slightly higher than that of petrol. India`s overall refined fuel demand includes consumption of fuel oil, bitumen and liquefied petroleum gas (LPG). State retailers sold 6.5% more LPG in the first half of July from a year ago, at about 1.075 million tonnes.