Mercedes Mullins
India's daily fuel consumption is growing faster than the global average, with a current consumption of about 5 million barrels per day, which is a 3% growth rate. India was one of the largest consumers of primary energy globally in 2020, with diesel being the highest in volume among fuels consumed, at 88.2 billion liters, followed by gasoline or petrol at 37.2 billion liters. In 2024, diesel consumption grew by 4.4% compared to the previous year, and petrol consumption is estimated to cross 39 MMT or 0.94 million barrels per day in 2025. India's energy demand is expected to double, with a five-fold increase in natural gas demand by 2050.
| Characteristics | Values |
|---|---|
| Daily Fuel Consumption | 5 million barrels per day |
| Growth Rate | 3% |
| Global Growth Rate | 1% |
| Diesel Consumption in 2020 | 88.2 billion liters |
| Gasoline Consumption in 2020 | 37.2 billion liters |
| Gasoline Consumption in 2022 | 796.37 thousand barrels per day |
| Gasoline Consumption in 2023 | 852.63 thousand barrels per day |
| Global Average Gasoline Consumption | 139.36 thousand barrels per day |
| Ethanol-blend Percentage in Petrol in 2013 | 0.67% |
| Ethanol-blend Percentage in Petrol in 2022 | 10% |
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What You'll Learn
India's petroleum consumption is about 5 million barrels per day
India's fuel consumption is expected to continue increasing, with the International Energy Agency (IEA) estimating that the country will contribute a quarter of the growth in global energy consumption in the next two decades. BP has estimated that India's energy demand will double by 2050, with a five-fold increase in natural gas demand.
India's current fuel consumption consists of a variety of petroleum products, including aviation turbine fuel (ATF), liquified petroleum gas (LPG), naphtha, bitumen, and petcoke, with petrol and diesel comprising more than half. Diesel consumption has been higher than petrol consumption in recent years, with 88.2 billion liters of diesel consumed in 2020 compared to 37.2 billion liters of petrol.
To reduce its dependence on fossil fuels, the Indian government has been promoting alternative energy sources. The ethanol-blend percentage in petrol has increased from 0.67% in 2013 to 10% in May 2022, resulting in a reduction of 2.7 million tonnes of CO2 emissions. While electric vehicle sales are gaining traction, they still only account for a small percentage of total vehicle sales.
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India's fuel consumption is growing faster than the global average
India was one of the largest consumers of primary energy globally in 2020, with diesel being the highest consumed fuel type at 88.2 billion liters, followed by gasoline or petrol at 37.2 billion liters. India's energy consumption patterns have been shifting; while coal remains the leading primary source of energy, meeting almost half of the country's energy demands, crude oil is the second-largest source, meeting a quarter of the demand.
To address the increasing energy demand and concerns about the environment, the Indian government has been working to reduce its dependence on fossil fuels. At the Geo India 2022 conference, Union Petroleum Minister Hardeep Singh Puri highlighted the government's commitment to alternative energy sources. He noted that the ethanol-blend percentage in petrol had increased from 0.67% in 2013 to 10% in May 2022, ahead of schedule. This initiative is expected to reduce 2.7 million tonnes of CO2 emissions, benefiting the environment.
According to the International Energy Agency (IEA), India will significantly contribute to the growth in global energy consumption in the coming decades. BP estimates that India's energy demand will double, and natural gas demand is projected to increase fivefold by 2050. To keep up with this increasing demand, India has imposed passenger vehicle fuel-efficiency standards and made fuel efficiency labelling for new vehicles mandatory since 2011. Additionally, as part of the National Electric Mobility Mission Plan (NEMMP) 2020, India introduced the Faster Adoption and Manufacturing of Electric Vehicles (FAME) scheme in 2015 to promote the adoption of electric vehicles.
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India's fuel consumption decreased in 2020 due to COVID-19 lockdowns
India's fuel consumption decreased in 2020 due to the COVID-19 lockdowns imposed by the government to curb the spread of the virus. The restrictions halted most business activities and transportation networks, leading to a significant reduction in fuel demand and consumption.
India's fuel consumption in March 2020, during the lockdown, shrank by 18% compared to the previous year, marking the most substantial decline in over a decade. Diesel, the most consumed fuel in the country, witnessed a 24.23% drop in demand as trucks and railways were largely halted. Petrol sales also decreased by 16.37% as cars and two-wheelers were taken off the roads. Jet fuel consumption plummeted to a five-year low, declining by 29.86% month-on-month to 484,000 metric tons.
The decrease in fuel consumption had a notable impact on air quality. Cities with previously poor air quality reported cleaner air and lower pollution levels. NASA images revealed that aerosol levels in northern India, a highly polluted region, were at a 20-year low for that time of year. T.K. Joshi, a member of the Central Pollution Control Board (CPCB), attributed this improvement to the reduced use of fossil fuels during the lockdown, underscoring the link between fossil fuel consumption and air pollution.
The Indian government implemented fuel subsidies to manage prices as the consumption volume of petroleum products declined. Despite the overall decrease in fuel consumption in 2020, India remained one of the largest consumers of primary energy globally, with coal and crude oil meeting almost half and a quarter of the country's energy demand, respectively.
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India's energy demand will double by 2050
India's energy demand is projected to increase significantly by 2050, driven by rapid economic development, urbanization, and climate-induced heat stresses. Here are some key considerations regarding India's energy demand outlook:
- India's Electricity Demand: India's electricity consumption has been rising rapidly, with a ~9% annual growth rate since FY21, compared to a 5% average in the previous decade. This trend is expected to continue, putting pressure on the country's energy infrastructure.
- Renewable Energy Targets: India has set ambitious targets for renewable energy by 2030, including installing 500 gigawatts of renewable energy capacity and reducing emissions intensity by 45%. While India is making good progress towards these goals, with over 40% of its power capacity already from non-fossil fuels, meeting these targets is crucial to curb energy demand growth by 2050.
- Clean Energy Transition: India is undergoing a rapid clean energy transition, with renewable electricity growing faster than in any other major economy. Solar power plants are now cheaper to build than coal-based ones, and India is a leading producer of modern bioenergy. This transition is expected to accelerate, benefiting the entire world through reduced carbon emissions.
- Green Hydrogen: Green hydrogen is expected to play a significant role in India's energy future. By creating demand for green hydrogen, India can replace grey hydrogen in refineries and the fertilizer sector, leading to substantial CO2 abatement. This initiative will contribute to India's net-zero goals and have a positive global impact.
- Energy Security and Affordability: As the world's third-largest energy importer, India faces challenges in energy security due to volatile market conditions and rising commodity prices. Balancing energy affordability, security, and sustainability is essential, and well-designed policies can help navigate these complexities.
- Transmission and Infrastructure Challenges: India needs to address delays in transmission expansion and grid connectivity to facilitate the integration of renewable energy sources effectively. Enhancing transmission infrastructure and improving policy frameworks will be crucial in meeting the country's energy demands sustainably.
In summary, India's energy demand is expected to double by 2050, and a comprehensive approach that includes renewable energy integration, clean energy technologies, policy innovations, and infrastructure enhancements will be necessary to meet this demand sustainably while also contributing to global decarbonization efforts.
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India's diesel consumption grew by 4.4% in FY24
India's fuel demand has been steadily increasing over the years, with a record high of 233.276 million tonnes (4.67 million barrels per day) in the financial year ending in March 2024, a 5% increase from the previous year. This demand is a proxy for oil consumption in the country.
Diesel sales, which account for a significant portion of India's fuel consumption, have been a key driver of this growth. Diesel is primarily used by trucks and commercial passenger vehicles, and its sales increased by 3.1% year-on-year to 8.04 million tonnes in March 2024. Notably, diesel consumption during the same financial year (FY24) at 89.65 million metric tonnes (1.86 million barrels per day) grew by 4.4% compared to 85.9 million metric tonnes (1.78 million barrels per day) in FY23. This increase in diesel consumption is attributed to the rise in economic activities, reflecting a decade-long Compound Annual Growth Rate (CAGR) of 2.7%.
The increase in diesel consumption is also influenced by India's vehicle sales. For instance, three-wheeler sales registered a remarkable growth of 41.5% in FY24 compared to the previous fiscal year. Two-wheelers, which dominate vehicle sales in India, also experienced a significant growth of 13.3% year-on-year. While electric vehicle sales are gaining traction, they still represent only a small fraction of the total vehicle registrations in the country.
In addition to diesel, gasoline sales in March 2024 grew by 6.9% year-on-year, contributing to the overall increase in fuel consumption. Bitumen, crucial for road construction, saw stable sales in March but recorded a notable 9.9% rise for the fiscal year. With COVID-19 restrictions easing globally, India's fuel consumption is expected to continue its upward trend, barring any unforeseen circumstances or new pandemic-related disruptions.
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Frequently asked questions
India’s petroleum consumption is currently about 5 million barrels per day, which is growing at 3% — higher than the average global growth rate of around 1%.
Coal is the leading primary source of energy in India, meeting the needs of almost half of the country's energy demand.
Diesel makes up about 38% of India's total oil consumption.
Diesel consumption in India was about 88.2 billion liters in 2020.
India is working to reduce its dependence on fossil fuels by increasing the ethanol-blend percentage in petrol and promoting the adoption of electric vehicles.
