India's April-January oil product sales rose 1.5 per cent to 75.21 million tonnes, helped by buoyant demand from the transport sector, an industry official told Reuters on Monday.

Diesel sales, which account for about 40 per cent of all petroleum products sold in India, rose 2.4 per cent to 24.24 million tonnes, while petrol sales climbed 9.8 per cent to 6.24 million tonnes as sales of cars continued to rise, he said.

"Demand from the transport sector has remained strong and is expected to remain good," the official, who did not want to be named, said.

Car sales in April-January, the first 10 months of 2002-03 rose 8.6 per cent to 436,475 units, while sales of trucks and buses increased 32 per cent to 149,506 units.

Bitumen sales soared 17.1 per cent to 2.15 million tonnes because of heavy demand for an extensive network of new highways being built across the country.

In January, sales of all oil products rose 2.1 per cent to 7.74 million tonnes but diesel sales were flat at 2.34 million tonnes.

Industry officials said a severe winter and heavy fog in northern India in January slowed down movement of trucks and agricultural activity, affecting oil consumption during the month.

"But demand from these sectors is expected to return to normal in February," the official said.

India's LPG sales rose 10 per cent to 6.71 million tonnes. The rise in domestic demand and an unplanned shutdown of a large refinery forced the country to hurriedly buy 111,000 tonnes of LPG for February delivery as LPG stocks fell sharply.

Oil product sales fell for two years but have grown gradually since the middle of last year, encouraging refiners to plan expansions, which they had deferred when sales were falling.

India's largest private refiner, Reliance Industries, is raising the capacity of its 540,000-bpd Jamnagar refinery by 20 per cent by the end of 2003.

Essar Oil, another private firm, plans to build a 240,000-bpd refinery by 2005 and is looking for a strategic partner to eventually double its capacity and export refined products in the international market.