India’s fuel demand has seen a significant uptick in 2024, reflecting the country’s growing energy consumption and its ambitious goal of becoming a “Viksit Bharat” (Developed India) by 2047. According to data from the Ministry of Petroleum and Natural Gas, the country’s fuel consumption has risen steadily, driven by increased industrial activity, economic expansion, and a changing consumption pattern.
In 2024, petrol consumption in India rose by nearly 8% year-on-year until November, while diesel—the most widely consumed petroleum product in the country—saw a growth of 2.4% in the same period. Diesel consumption reached 83,087 tonnes by November 2024, while petrol demand stood at 36,137 tonnes, highlighting a shift towards greater petrol consumption amid changing consumer preferences.
The increase in fuel demand is largely attributed to the surge in industrial activity and a robust economic recovery. The country’s expanding middle class and rising consumer spending have particularly fueled the demand for petrol, which is increasingly preferred over diesel in many urban areas.
Industrial Growth And Changing Consumption Patterns
The steady demand for diesel, primarily used in trucks, commercial vehicles, and agricultural machinery, reflects ongoing industrial growth and infrastructure development. Despite this, the demand for petrol has outpaced diesel consumption in 2024. The prolonged monsoon season also played a role in this trend, affecting transportation patterns and consumption behavior, especially in rural areas.
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Other petroleum products such as aviation turbine fuel (ATF) and liquefied petroleum gas (LPG) have also experienced significant growth, indicating a broader rise in energy consumption across various sectors, from aviation to household fuel needs.
Oil Companies Expand Capacity To Meet Rising Demand
As fuel demand continues to rise, India’s major oil companies, including Indian Oil Corporation Limited (IOCL), Bharat Petroleum Corporation Limited (BPCL), and Hindustan Petroleum Corporation Limited (HPCL), are making significant investments to meet the growing need. These companies have announced plans to set up new refineries and expand the capacity of existing ones to keep pace with the surge in fuel consumption.
Despite growing attention to alternative fuels, India will continue to rely heavily on oil in the coming years. The government projects that India will become the largest contributor to global oil demand growth by 2030, as the demand in developed economies and China slows or declines.
The Indian Oil Market Outlook 2030 report predicts that the country’s rapid industrial expansion will drive a significant increase in diesel demand. By 2030, diesel consumption will account for nearly half of India’s total oil demand growth and contribute more than one-sixth of the global increase in oil consumption.
Long-Term Growth Projections For India’s Petroleum Demand
Looking ahead, S&P Global Commodity Insights projects that India’s petroleum product demand will grow by nearly 2 million barrels per day (bpd) by 2035. This surge in demand underscores the country’s crucial role in the global energy market and highlights the ongoing challenges and opportunities in India’s energy landscape as it aims to balance rapid development with sustainability goals.
In summary, India’s fuel demand growth in 2024 reflects a broader economic and industrial expansion, positioning the country as a key player in shaping the future of global oil consumption. India is making strategic investments in infrastructure and refinery capacity to meet its rising energy needs and contribute to global energy trends in the years ahead.
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