India’s diesel consumption likely to surpass 93 mt in FY25

By Pune Media On Oct 23, 2024 16

Diesel consumption in India, a mainstay of the transport and logistics sector, is likely to surpass 93 million tonnes (mt) in the current financial year, ending March 2025.

V Satish Kumar, who holds the additional charge of Indian Oil Corporation (IoCL) Chairman, said that diesel demand in FY25 is likely to grow by 3-4 per cent on an annual basis.

Speaking to reporters on the sidelines of the World Biogas Association’s India Congress 2024, he said that consumption of diesel is expected to take off from the current month, aided by the end of monsoon rains and the harvesting of Kharif crops.

Also read: After September high, India’s diesel exports may lose steam on lower margins, domestic demand

Kumar also holds the charge of Director (Marketing) at India’s largest fuel retailer. He took charge as Chairman at India’s largest oil marketing company (OMC) last month.

India’s diesel consumption slipped to its lowest in the last two years during September 2024 due to subdued manufacturing activity and above-normal rains impacting mobility, as well as a lower requirement for mechanised irrigation.

Both August and September this year have witnessed a fall in diesel usage due to a decline in manufacturing and industrial activity coupled with lower mobility caused by widespread rains, particularly in northwest and central India.

According to Crisil Ratings, domestic consumption of petroleum products logged a compound annual growth rate (CAGR) of 4 per cent over the past decade. Transport fuels, accounting for around 56 per cent of total consumption, grew by 4 per cent.

Crisil Ratings Senior Director Anuj Sethi said, “We expect overall petroleum product consumption to slightly moderate and register around a 3 per cent CAGR over the next six years, primarily due to slower growth of 2-3 per cent in transport fuel consumption. This will be caused by improving fuel economy, the rising share of vehicle sales with alternative cleaner fuels, and the 20 per cent ethanol blending target proposed by the Government of India.”

Published on October 23, 2024

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