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Amid a scorching Indian summer, relentless blackouts and frenzied election campaigning, India has burned a record amount of diesel fuel in May.

A surge in diesel demand would normally indicate an uptick in the economy. But the latest pickup in demand doesn’t necessarily reflect a sustained economic recovery in the south Asian country, or spell relief for its oil refiners which produce the fuel. That’s because underlying economic and industrial activity hasn’t grown strong enough to sustain high diesel demand after peak summer period ends. And in the absence of election-driven fuel consumption, conditions may lapse back to the softer demand levels seen earlier this year.

Diesel is the most popular fuel in India, accounting for around 44 Percent of total fuel consumed, compared to gasoline which accounts for only around 10%. Diesel also forms the backbone of India’s economic activity.

Almost two-thirds of India’s diesel is consumed by the transport sector, which moves everything from raw minerals to consumer goods across the vast country. A big chunk of passenger cars also run on diesel due to heavy subsidies. The other third of India’s diesel is burnt in the agricultural and industrial sectors, where consumption can swing wildly with changes in weather patterns, especially summer.

Every year, summer heat dries up the reservoirs that serve hydroelectric dams, putting tremendous strain on a decades-old power grid, forcing city dwellers and farmers alike to resort to increased diesel use.

According to a government-sponsored survey last year, power supply can fall short of demand by as much as 18 Percent  in peak periods.

India’s diesel demand hit a new monthly record in May, rising by 1.2 Percent to 1.6 million barrels a day from a year earlier, official data showed. Extensive election campaigning by political parties and a delayed monsoon season also helped boost demand.

This surge in demand comes after several months of weak fuel demand as poor economic growth has kept a lid on domestic diesel consumption. Private Indian refiners like Reliance Industries Ltd.500325.BY -0.44 Percent are struggling, in part due to weak local demand and also because of stiff tough competition in their export markets.

Singapore-based traders said that the last gasoline cargo exported by Reliance to the Atlantic Basin was in May, compared to regular weekly cargoes a couple of years earlier, indicating a sharp fall in its exports.

For the first time since October last year, the amount of crude oil processed by the refineries of India’s Reliance Industries and Essar Oil Ltd. exceeded 1.8 million barrels a day of crude oil in May, Johannes Benigni, head of JBC Asia said in a recent report. That means they’ve increased fuel production for the first time in almost eight months, but risk having to cut production levels again if the demand outlook falters.

He said Indian refiners have lost ground in Europe where their diesel exports have fallen by 35,000 barrels a day in the first quarter, and face pressure from the flood of fuel exports from the U.S. and the Middle East. The U.S. has become the world’s biggest exporter of oil products on the back of its energy boom, while the Middle East is building massive new refineries of its own.

India’s private refiners are holding up better their counterparts in Japan and South Korea, but times are tough: Export markets are likely to remain challenged, and it’s too soon to speak of a sustained recovery in domestic diesel consumption.

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