Diesel demand growth falters to lowest in 4 years in FY25

NEW DELHI: Diesel demand grew at just about 2% in 2024-25, the slowest since the pandemic, as the pace of expansion in overall POL — petroleum, oil and lubricants — consumption more than halved from 5% a year ago, latest government data shows.

In contrast, petrol sales rose at 7.4% during the year ended March 31, marking an improvement over 6.4% growth clocked in 2023-24, according to provisional data released by the oil ministry’s market tracker Petroleum Planning & Analysis Cell .

Taken together, the faltering diesel consumption, considered a key indicator of economic activities, can be seen as an indicator of slowing economic growth as well as CNG (compressed natural gas) and electric vehicles displacing market share in the utility and commercial mobility segments.

Rising petrol consumption bears out the market shift in the passenger vehicle segment as consumers prefer petrol cars, essentially out of fear as many cities have implemented the 10-year time-bar imposed by the National Green Tribunal for diesel vehicles in the National Capital Territory.

Still, diesel remains the largest selling fuel and mainstay of freight, construction and farming sectors, managing to keep its share in the overall POL sales at 38.2% during the year under review against 38.3% in 2023-24. In line with the rising volume of petrol car sales, its share has improved to 16.7% from 15.9% in the year-ago period.

Jet fuel consumption also posted a healthy growth of 9% during 2024-25 in line with the rush of air travellers keeping flights full. Jet fuel sales took a long time to recover after falling 53.8% in the pandemic year. LPG, or liquefied natural gas supplied to households as cooking fuel, also clocked a gain of 4.7%, maintaining its trend.