India's fuel demand reaches four-month high as domestic energy consumption strengthens

Thursday 06 August 2026 - 16:45

By: Sahili Aya

India's fuel demand reaches four-month high as domestic energy consumption strengthens

India's fuel consumption climbed to its highest level in four months during July, reflecting resilient domestic energy demand despite mixed performance across individual petroleum products.

New data released by the country's Petroleum Planning and Analysis Cell (PPAC) showed total fuel consumption reaching 19.92 million metric tons, representing an increase of approximately 3% compared with both the previous month and the same period last year.

Energy demand continues to recover

The July figures suggest that economic activity and transportation demand remained robust, helping lift overall fuel usage to its strongest level since March.

While aggregate consumption improved, the performance of individual fuel categories varied considerably, illustrating changing consumption patterns across households, industry and transportation.

LPG records strongest monthly growth

Liquefied petroleum gas (LPG) posted one of the largest monthly gains, with demand increasing by more than 7.5% from June to 2.35 million metric tons, its highest level in four months.

Despite the monthly rebound, LPG consumption remained significantly below its level a year earlier, highlighting the uneven nature of demand across the energy sector.

The figures come as India continues efforts to diversify its energy supply. The government is reportedly planning to source as much as one-quarter of its LPG imports from the United States beginning in 2027, reducing dependence on Middle Eastern suppliers while supporting broader trade discussions with Washington.

Mixed trends across transport fuels

Gasoline consumption continued to expand, rising modestly from June while recording strong year-on-year growth, suggesting sustained demand from motorists and passenger transportation.

Diesel, the country's most widely used transport and industrial fuel, presented a contrasting picture. Annual demand remained higher than last year, but monthly consumption declined, reaching its lowest level since February.

Elsewhere, naphtha demand weakened compared with the previous year, while bitumen—widely used in road construction—recorded annual growth despite a sharp decline from June levels. Fuel oil consumption, meanwhile, registered a substantial month-on-month increase, indicating stronger industrial usage.

Strategic energy security remains a priority

Alongside rising domestic consumption, India continues to strengthen its long-term energy security strategy.

State-owned Oil and Natural Gas Corporation (ONGC) plans to dedicate half of its proposed 1.75-million-metric-ton oil storage facility to the country's strategic petroleum reserves, reinforcing India's ability to manage future supply disruptions and enhance national energy resilience.

As fuel demand remains closely tied to economic growth, the latest consumption figures underscore India's position as one of the world's fastest-growing energy markets, with infrastructure expansion and supply diversification expected to remain central priorities in the years ahead.