India’s petrol and diesel consumption, which account for more than half of India’s refined petroleum products usage, rose to a six-month high in November 2024.

According to the Petroleum Planning and Analysis Cell (PPAC), India’s diesel consumption, a mainstay of the transport and logistics sector, rose by 7 per cent M-o-M and more than 8 per cent Y-o-Y to 8.16 million tonnes (MT), which is the highest since the record consumption in May 2024 (8.4 MT).

In fact, the consumption of diesel—accounting for over 40 per cent of India’s cumulative refined products usage—is expected to surpass the all time high record during FY24 at 89.65 MT. In FY25, the consumption is likely to surpass 93 MT.

In October, V Satish Kumar, who is Director (Marketing) at state-run retailing giant Indian Oil Corporation (IoCL), said that diesel demand in FY25 is likely to grow by 3-4 per cent on an annual basis.

Similarly, the usage of petrol, primarily consumed by the personal vehicles segment, grew over 9 per cent Y-o-Y to 3.42 MT. Petrol consumption was largely flat on a monthly basis.

The usage of petrol has been growing since the last two-three years, averaging at around 3 MT since FY24, largely aided by growing number of personal category four-wheelers and two-wheelers.

However, the consumption of aviation turbine fuel (ATF) declined, albeit marginally by 1 per cent M-o-M to 743,000 tonnes last month. On an annual basis, the usage was up by around 8 per cent.

India’s jet fuel consumption rose to its second highest level on record during October 2024 (751,000 tonnes) aided by rising domestic and international traffic as well as airlines adding more aircraft and destinations. Diwali falling on the last day of the month also boosted footfalls.

Last month, S&P Global Commodity Insights said that the country’s demand for the key auto fuels—diesel and petrol—is expected to grow by as much as 55,000 barrels per day (b/d) in the October-December festival season.

India’s appetite for oil products in October-December is set to get a boost from the upcoming festival season as well as the agricultural season, recovering from a few months of subdued consumption because of excessive monsoon rains.

“Looking ahead to Q4, we estimate India’s oil demand to grow by 3.5-4 per cent year over year. We forecast an annual demand increase of 50,000-55,000 b/d for both gasoline and diesel in Q4, although the northeast monsoon rains may slightly impede demand,” said Himi Srivastava, South Asia oil analyst at S&P Global Commodity Insights.

India meets 85 per cent of its crude oil demand through imports. Crude oil futures moved higher October 22 against a backdrop of continued uncertainty regarding the scope of an expected Israeli strike against Iran.

“Elections in major states like Maharashtra and Jharkhand are also expected to boost transportation fuel demand. Additionally, the marriage season from November to January typically results in increased automobile sales and goods movement, further pushing up fuel demand,” added Srivastava.

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