India’s monthly demand for oil fell at its lowest since May 2003, after Prime Minister Narendra Modi’s demonetization move.

Fuel consumption fell down by 4.5 percent from 16.2 million tons in 2016 to 15.5 million tonnes in January 2017, Bloomberg reported quoting the Oil Minister’s Petroleum Planning and Analysis Cell on Friday. Diesel which accounts for 40 percent of the total demand for fuel saw the biggest decline with a drop of 7.8 percent since September.

This decline in demand is due to demonetization. I would expect this decline to be a one off and dissipate from February. This should result in a slower demand growth for diesel in the first quarter in 2017.

Tushar Tarun Bansal, Director at Ivy Global Energy Since the demonetization of Rs 500 and Rs 1000 notes, Indian economy where most transactions happen in cash faced a sever crisis of liquid cash.

Petcoke consumption fell for the first time in more than a year, declining about 9.9 percent to 1.95 million tons. Gasoline consumption fell 0.6 percent to 1.8 million tons. Liquefied petroleum gas use expanded 16.4 percent to 2 million tons, while jet fuel demand increased 17.8 percent to 627,000 tons.

According to an economic survey presented by Union Minister of Finance Arun Jaitley, GDP growth may slow down to 6.5 percent from 7.9 percent in the previous year.