India’s Fuel Demand Hits Six-Month High In November

India’s fuel demand climbed to the highest level in six months in November. Total consumption of petroleum products rose to about 21.27 million tonnes. This was up 5.5 percent from October and about 3 percent higher than a year ago, as per data from the Petroleum Planning and Analysis Cell (PPAC).

The rise came after strong activity in transport, construction, and agriculture once the monsoon ended. India remains the world’s third-largest oil consumer. It also continues to buy discounted Russian crude from non-sanctioned suppliers.

With demand at a six-month peak, what signals does this send for energy use and linked sectors?

How Strong Was The November Fuel Demand Jump?

Total fuel demand in November was 21.27 million tonnes. This was the highest since May.

Diesel led the increase. Diesel use rose to about 8.55 million tonnes. That was up 12.2 percent from October and 4.7 percent higher than a year earlier. Diesel is the most used fuel in India. It powers trucks, buses, farm machines, and many industrial users.

Petrol/gasoline, showed a mixed trend. Sales came in at nearly 3.52 million tonnes. This was 4.1 percent lower than October but still 2.6 percent higher than in November last year. The fall from October came after a very strong festive travel month.

LPG demand also grew. LPG consumption reached about 2.86 million tonnes, up 7.1 percent year on year, fuelled by household and commercial usage.

Bitumen, which is used for making roads, saw a sharp jump. Demand rose nearly 38 percent from October and more than 28 percent from a year earlier. This points to strong road building and infrastructure work. At the same time, naphtha sales fell by about 19 percent year on year, showing weakness in some petrochemical activity.

If these numbers show where demand is rising, what do they say about the drivers behind this surge?

What Is Driving The Surge In Diesel, LPG And Bitumen?

Diesel demand got a boost from several factors. Goods movement picked up after the festival season. A cut in GST on diesel for commercial vehicles also supported usage, as it lowered fuel costs for transporters. Higher farm activity after the monsoon and more freight on highways added to the momentum.

Petrol demand eased from October but stayed above last year’s level. This suggests that personal mobility and small business use remain healthy, even if the festive spike has passed.

LPG demand growth reflects steady use in homes and eateries. Government schemes and rising urban use also support LPG consumption over time.

The strong rise in bitumen shows clear support from infrastructure spending. More road projects mean higher demand for bitumen and diesel and also support sectors such as construction materials and commercial vehicles.

With these drivers in play, what should investors and sector watchers track next?

What Should Investors Watch Next As Demand Stays Strong?

First, watch diesel and petrol trends in December and January. If diesel stays near or above November levels, it will signal sustained strength in freight, buses and construction. If petrol stabilises or rises again, it will show that personal mobility demand is holding up after the festival season.

Second, track bitumen demand and road-contract data. High bitumen consumption usually goes with strong road-building activity. This has links to cement, steel, and commercial vehicle sales. Any slowdown here could show a pause in the infrastructure push.

Third, monitor crude oil prices and refining margins. India imports most of its crude. Changes in global oil prices can influence margins for refiners and fuel retailers while impacting inflation and the trade deficit.

Fourth, keep an eye on policy moves. Tax changes on fuels, new rules on emissions, or changes in subsidies for LPG and other products can all shift demand patterns.

With total demand at 21.27 million tonnes in November, and diesel, LPG, and bitumen showing strong gains, the key question now is, will India’s fuel demand continue its current growth trend in the coming months, or will it slow down as festival activity and construction peaks taper off?

Sources:

Reuters
Reuters
ETEnergyworld.com
The Financial Express
Argus Media