Higher travel demand amid holiday season boosts petrol, diesel consumption in Dec

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India’s fuel consumption in December posted robust growth on back of holiday demand in the country. Petrol and diesel consumption grew 10.56 percent and 5.85 percent year-on-year respectively in the month, showed preliminary data, amid higher travel demand and pick up agricultural activity.

In December, the country’s diesel consumption was 8,048 thousand metric tonnes (TMT), compared to 7,603 TMT in the previous year. Diesel is the most consumed petroleum product in India mainly used by trucks and commercially run passenger vehicles and agricultural purposes.

In recent months, demand for diesel has remained low primarily due to heavy rains. Slower economic growth also affected diesel consumption, with the country’s GDP growth slowing to a seven-quarter low of 5.4 percent in the September quarter.

Meanwhile, petrol consumption in December was 3,305 TMT, as against 2,990 TMT in the same period last year. In the year 2024, growth in petrol consumption has remained healthy as the country is seeing a change in consumption pattern, with petrol demand picking up over diesel as the middle class expands.

The consumption of aviation turbine fuel (ATF), or jet fuel, came in at 778 TMT in the month under review, higher by eight percent from last year, as against 720 TMT consumed in December 2023. The demand of liquefied petroleum gas (LPG) was also up by 5.27 percent.

Fuel demand in 2024

The growth momentum in demand of diesel—accountable for almost 40 percent of petroleum product consumption—was relatively steady in the year majorly due to prolonged monsoons in the year and a change in consumption pattern.

According to oil ministry data, India’s petrol consumption rose by almost 8 percent in the year till November from the previous year, while diesel witnessed a growth of 2.4 percent in the same period.

India’s oil demand is further expected to increase over projections of robust growth in the country’s economy. An analysis by S&P Global Commodity Insights said the country’s petroleum product demand is projected to grow by nearly 2 million barrels per day (bpd) by 2035.