UPDATE 1-India's May domestic fuel sales drop 1.4 pct y/y

* Turn negative for first time in 7 months

* Crude oil imports rise 18.8 pct in May

* Naphtha use drops 28.9 pct, imports fall 72.9 pct (Adds detail)

By Nidhi Verma

NEW DELHI, June 29 (Reuters) - India's May fuel consumption fell 1.4 percent from a year earlier, its first drop in seven months, after gas supplies from a new field slashed the use of naphtha, government data showed on Monday.

Imports of crude oil dropped an annual 18.8 percent in May and refined products declined 15.6 percent, while naphtha imports tumbled 72.9 percent as consumption dropped 28.9 percent.

Reliance Industries Ltd (RELI.BO) began pumping gas in April from its deepwater block in the Krishna Godavari basin, off India's east coast. The gas is being sold to fertiliser plants and resulted in less sale of naphtha by 82,000 tonnes.

Oil product sales, a proxy of demand, dropped to 11.48 million tonnes from 11.64 million tonnes in the same month last year, the data showed. Reuters last week reported that India's oil products consumption might fall in May. [ID:nDEL477863]

Haldia Petrochemicals bought about 115,000 tonnes of less naphtha during the month due to a shutdown of its petrochemical plant, the government said in a statement.

Domestic diesel sales declined 1.3 percent in May from a year earlier, while petrol consumption rose 4.9 percent as car sales rose for the fourth month, the data showed.

For a table on India's oil product sales, exports and imports in May; see [ID:nDEL411976]

Asia's No. 3 oil consumer's crude oil imports surged 18.8 percent during the month to 2.84 million barrels per day (bpd) while oil products exports fell 33.4 percent mainly due to less shipments by private refiners, the data showed.

The data does not include imports and exports by Reliance Industries' new 580,000 bpd refinery in western Gujarat state.

Exports of diesel by private refiners fell 38 percent in May from a year earlier as Essar's Vadinar refinery in Gujarat was shut for most part of April for upgrade and Reliance had started selling gas oil to state refiners.

Overall, the country shipped 29.4 percent less diesel in May than a year earlier.

In April, Reliance had surrendered the export status and associated tax benefits of its older 660,000 barrels per day refinery to be able to sell products locally.

India exported 1.93 million tonnes of oil products in May, 33.4 percent less from the year ago. (Editing by Ranjit Gangadharan)