Fuel Demand in India Rises Amid Iran Conflict and Panic Buying

India saw an 8 percent year-on-year increase in fuel demand in March, driven by panic buying as the Iran war escalated. Despite concerns, the government and oil companies stated that refiners are operating at optimal capacity and that the country has sufficient stocks of crude oil, petrol, diesel, and LPG.

Key Highlights

• India's fuel demand rose 8 percent year-on-year in March amid Iran conflict and panic buying
• Petrol demand increased 7.6 percent while LPG sales dropped 13 percent due to supply curbs
• Annual fuel demand grew 3.6 percent with petrol up 6.5 percent and LPG up 6 percent

March Fuel Consumption Trends

Petrol demand rose 7.6 percent in March as motorists queued at filling stations across several regions, fearing shortages. Diesel sales also surged, with bulk consumers stocking up before a significant price hike for industrial buyers. However, LPG sales fell by 13 percent due to supply restrictions imposed during the month.

Aviation turbine fuel (ATF) consumption remained unchanged in March. The flat demand for ATF was linked to numerous flight cancellations following the outbreak of the conflict in Iran.

Annual Fuel Demand Overview

For the full year ending in March, overall fuel demand grew by 3.6 percent. Petrol consumption increased by 6.5 percent, while ATF demand rose by 2 percent. LPG usage grew by 6 percent over the same period.

Industry executives noted that the spike in diesel sales was partly due to bulk buyers anticipating a steep price increase. This led to increased purchases before the new prices took effect.

Supply and Stock Updates

Authorities continued to assure the public that there are adequate reserves of all major fuels. Oil companies maintained that refineries are running efficiently and that the supply chain remains stable despite the increased demand and ongoing geopolitical tensions.

The government and industry leaders are monitoring the situation closely to prevent any disruptions in fuel availability. They have emphasized that current stocks are sufficient to meet national requirements.

The data reflects how external events, such as international conflicts, can influence domestic fuel consumption patterns. It also highlights the importance of maintaining robust supply chains and transparent communication during periods of uncertainty.

Updated On Apr 8, 2026 at 08:42 AM IST