India’s Fuel Demand in June Down by 4.7%, Month-on-Month

08th July 2025: There was  fall in the demand for fuel in June 2025 by almost 4.7% compared to May 2025. The decline in demand is attributed to seasonal factors related to rainfall across the country. Vehicular movement remains restricted during the peak monsoon period, which typically begins in June, in line with historical trends.

Total fuel consumption during the month stood at 20.31 million metric tons, according to data released by the Petroleum Planning and Analysis Cell (PPAC).

Key Fuel Metrics for June 2025

The drop in fuel usage aligns with historical trends, as demand typically declines during the rainy season before increasing again in August or September.

• Petrol (Gasoline): Sales dropped 6.9% month-on-month to 3.52 million metric tons, down from 3.78 million tons in May. However, on a year-on-year basis, petrol demand rose 6.7%.
• Diesel: Consumption slightly increased by 1.6% year-on-year, reaching 8.11 million metric tons in June. Despite the annual rise, diesel use was lower than in May, at 8.59 million tons.
• LPG (Cooking Gas): Monthly sales declined 4.9% to 2.53 million metric tons. Still, LPG consumption posted a strong 9.1% growth year-on-year.
• Naphtha: Monthly sales edged up 3% to 1.03 million metric tons, with an annual increase of about 2%.
• Bitumen: Used primarily in road construction, bitumen sales saw a sharp 16% drop in June from the previous month, reflecting reduced infrastructure activity during the rains.

Seasonal Context and Economic Backdrop

UBS analyst Giovanni Staunovo noted that Indian fuel demand typically dips during the monsoon months, with consumption trending lower until late in the third quarter of the calendar year. This seasonal trend is well-known in the oil markets and is a crucial input for forecasting energy needs.

The decline in fuel usage comes despite broader economic momentum. India’s services sector recorded its strongest growth in ten months in June, supported by buoyant demand and easing price pressures. Meanwhile, Oil Minister Hardeep Singh Puri reiterated that the government is prepared to safeguard fuel supply in the face of global uncertainties, particularly tensions in the Middle East.

Summary Table: Monthly Fuel Consumption (in million metric tons)

Outlook

While monsoon-related slowdowns are expected to persist in July, demand typically begins to recover by late August. Analysts and policymakers will be closely watching consumption patterns and geopolitical developments as India navigates through the seasonally weak quarter.

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