India’s Fuel Consumption Falls 6.5% In May as LPG Demand Drops Sharply

India’s fuel consumption declined by 6.5 percent in May, driven by a sharp drop in LPG demand and subdued growth in petrol and diesel usage amid global energy disruptions and rising fuel prices. The data, released by the Petroleum Planning and Analysis Cell (PPAC), indicates a slowdown in overall petroleum product consumption compared to the same period last year.

Total petroleum product demand fell to 19.93 million metric tonnes (MT) in May, down from 21.3 MT recorded in the corresponding month last year. The decline has been largely attributed to volatility in global crude oil markets, supply chain disruptions, and price pressures affecting both bulk and retail fuel consumption.

LPG consumption recorded the steepest fall, dropping by 20.5 percent to 2.13 MT during the month. Naphtha demand also saw a significant decline of 29.5 percent, as refiners reportedly diverted more of the feedstock toward LPG production to meet shifting domestic requirements. These changes reflect ongoing adjustments in fuel allocation amid changing market conditions.

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Meanwhile, petrol and diesel demand continued to grow but at a slower pace, rising by 3.3 percent and 1.5 percent respectively. Aviation turbine fuel (ATF) consumption remained largely flat at 7.83 lakh tonnes, as airlines reportedly limited flight operations in response to cost pressures and demand fluctuations.

The overall decline comes amid heightened geopolitical tensions in West Asia, particularly the conflict involving Iran and the United States, which has disrupted global energy flows. The situation has been further complicated by increased crude oil price volatility, with Brent crude frequently crossing the $120 per barrel mark in recent months before stabilising at lower levels in more recent trading sessions.

Analysts note that disruptions linked to the Strait of Hormuz and fluctuating tanker movements have added to supply uncertainty, keeping global oil markets unstable. While traffic through key shipping routes has gradually recovered, concerns remain that lingering geopolitical risks and price instability could continue to influence fuel consumption patterns in the coming months.

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