Slowdown in Diesel Demand Reflects Economic and Market Changes

NEW DELHI: The growth in diesel demand has slowed to just about 2% in 2024-25, the lowest rate since the pandemic. This slowdown is part of a broader reduction in the growth of petroleum, oil, and lubricants (POL) consumption, which has more than halved from 5% the previous year, according to the latest government data.

Contrasting Trends in Fuel Consumption

In contrast, petrol sales saw a 7.4% increase during the year ending March 31, up from 6.4% in 2023-24. This shift is attributed to consumers' growing preference for petrol cars, partly due to environmental regulations affecting diesel vehicles in urban areas.

Impact on Economic Indicators

The faltering diesel consumption, a key indicator of economic activity, suggests a slowdown in economic growth. Additionally, the rise of compressed natural gas (CNG) and electric vehicles is beginning to displace diesel in commercial and utility segments.

Jet Fuel and LPG Show Robust Growth

Jet fuel consumption rebounded with a 9% growth in 2024-25, reflecting the recovery in air travel post-pandemic. Meanwhile, liquefied petroleum gas (LPG) for household use continued its steady growth with a 4.7% increase.