India sees 117% Growth in Petrol Consumption Over the Decade

Key Highlights:

• India's petrol consumption surges by 117% in the last decade
• Petrol overtakes diesel as the primary fuel in India's passenger vehicle market.
• March 2024 witnesses the second-highest levels of petrol and diesel consumption.
• FY 2023-24 records a record high in fuel demand, with petrol sales rising by 6.4%.

India's petrol consumption has surged more than double over the past decade, according to data released by the Ministry of Petroleum and Natural Gas. Between 2013-14 and 2023-24, the country witnessed a staggering 117% increase in annual petrol consumption. This surge comes amid escalating concerns over environmental pollution and the impact of vehicular emissions.

The substantial growth in petrol consumption over the last decade appears contradictory to ongoing efforts in environmental conservation and carbon emission reduction across various sectors, particularly in transportation. Petrol remains a primary fuel in India's transportation sector, notably in passenger vehicles. The surge in vehicle sales, particularly since the Covid-19 pandemic, has significantly amplified consumer preference for personal mobility, thereby driving up the demand for petrol.

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Shift in Market Dynamics: Rise of Petrol over Diesel

Data from the ministry also reveals a notable shift in the consumption dynamics of diesel. Between 2013-14 and 2023-24, diesel consumption in India increased by 31%. Despite this growth, petrol has surpassed diesel as the dominant fuel in the Indian passenger vehicle market. 

Factors contributing to the rise of petrol-propelled vehicles include deregulation, increasing disposable income, the emergence of an aspirational middle class, and the narrowing price gap between petrol and diesel nationwide.

March 2024: Second-Highest Consumption Levels

In March 2024, India experienced its second-highest levels of petrol and diesel consumption, reflecting the escalating demand for both personal and commercial mobility. According to the Petroleum Planning and Analysis Cell (PPAC) of the Ministry of Petroleum and Natural Gas, total fuel demand in March reached 4.99 million barrels per day (mbpd), slightly lower than the 5.02 mbpd recorded in the same period the previous year. Petrol sales in March 2024 grew by 6.9% year-on-year (YOY) to 3.32 million tonnes, while diesel sales increased by 3.1% to 8.04 million tonnes.

Record Fuel Demand in FY 24

In fiscal year 2023-24, India's fuel demand surged to a record high of 4.67 mbpd, up from 4.48 mbpd in the previous fiscal year. Petrol sales experienced a notable increase of 6.4% compared to the previous fiscal year, while diesel sales recorded a 4.4% year-on-year growth.