Early Rains dampen Fuel Demand Growth In June

Early rains in several parts of the country dampened fuel consumption in June, with diesel slipping to negative territory again after two months of growth, according to provisional industry data. After two months of robust consumption growth, petrol demand slowed to 2.3% to 1.4 million tonnes in the first half of June, sales data of three state-owned fuel retailers, which control about 90% of the market, showed. Petrol demand had risen by close to 9% in May.

Diesel saw a 4.8% decline in consumption at 3.26 million tonnes between June 1 and June 15.

The demand for India's most used fuel has rebounded since April - rising by nearly 4% in April and 2% in the following month.

Diesel, the lifeline of transport and rural agri economy, saw a just 2% growth in demand in the fiscal year ended March 31, 2025, witnessing a negative growth in most months.

Industry officials said early arrival of rains led to reduced demand in irrigation while also dampening vehicular movement.

The India Meteorological Department declared the monsoon onset over Kerala on May 24, eight days earlier than the usual June 1 date. This early arrival triggered widespread rains across several states, including Karnataka, Maharashtra and the North-East.

Usually, the onset of summer triggers demand for irrigation in rural areas and for air-conditioners in urban areas. Holiday travel also boosts demand. But in June, diesel demand was tepid.

Petrol sales in the first half of June were 7% lower than 1.5 million tonnes consumption during May 1-15. Its consumption was up 7% when compared with the same period in June 2023 and 30% higher from Covid-restriction period in June 2021.

On the other hand, diesel demand was 5.2% lower when compared to consumption in June 1-15, 2023, and 3.1% below the first half of May 2025. It however was 9.5% higher than June 2021, when restrictions imposed to curb spread of Covid-19 virus had reduced economic activity.

The growth in both petrol and diesel sales in April and May this year was on the back of rise in consumption for electioneering last year.

Jet fuel consumption grew 3.1% to 328,900 tonnes in June 1-15 this year. ATF sales were 8.4% higher than consumption in May 1-15, 2023, and 12% over June 1-15, 2021. Month-on-month, ATF consumption was however nearly 2% lower.

LPG continued to be in the fast lane with 4% growth to 1.27 million tonnes in June 1-15, driven by Ujjwala connections. Since 2019, the fuel consumption has risen at a compound annual growth rate of 37%.

Cooking gas sales were however 6% lower than 1.35 million tonnes consumption of May 1-15. Its usage was 10.7% more than consumption in May 1-15, 2023, and 32.6% higher than June 1-15, 2021, the data showed.