Fuel Demand in August: Petrol Up 9.1%, Diesel Up 10.2%, LPG Falls

Petrol and diesel sales in India recorded strong growth in August, driven partly by continued agricultural activity and higher fuel use amid uneven monsoon rainfall. Data from Indian Oil Corporation, Bharat Petroleum Corporation and Hindustan Petroleum Corporation showed that petrol demand increased 9.1% year-on-year to 3.48 million tonnes, while diesel consumption rose 10.2% to 6.27 million tonnes.

Petrol sales continued their strong run after increasing 9.7% in July. August consumption was also 14% higher than the level recorded in August 2024 and 30.7% above August 2023. On a month-on-month basis, petrol sales increased nearly 1%, indicating sustained demand from motorists despite the seasonal slowdown normally associated with the monsoon.

Diesel demand recorded its second consecutive month of double-digit annual growth, following a 10.7% increase in July. Diesel is widely used for freight movement, agricultural machinery and irrigation pumps. Uneven rainfall during the peak sowing period meant farmers in several areas continued relying on diesel-powered pumps, supporting overall consumption.

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However, diesel sales declined 12% from July's 7.13 million tonnes. Despite the monthly fall, August consumption remained 9.7% above the corresponding month in 2024 and 6.3% higher than August 2023. Aviation turbine fuel also recorded growth, with sales rising 5.6% year-on-year to 677,100 tonnes, while increasing 1.3% from July.

The unusual rainfall pattern was a key factor behind the stronger demand for transport and agricultural fuels. Fuel consumption typically moderates after the arrival of the monsoon because irrigation requirements decline and vehicle movement can slow. This year, however, delayed and uneven rains kept irrigation needs elevated in several regions, contributing to higher diesel consumption and supporting petrol demand.

In contrast, LPG sales continued to weaken, falling 16.1% year-on-year to 2.42 million tonnes in August after declining 17.4% in July. Industry officials attributed part of the decline to some industrial and commercial users shifting towards piped natural gas following supply disruptions and restrictions linked to the West Asia crisis. On a monthly basis, however, LPG sales increased 2.2% from July's 2.37 million tonnes.

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