Early monsoon dampens fuel demand growth in June; diesel dips 4.8%

After two months of robust consumption growth, petrol demand slowed to 2.3 per cent to 1.4 million tonnes in the first half of June, sales data of three state-owned fuel retailers showed

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 per cent to 1.4 million tonnes in the first half of June, sales data of three state-owned fuel retailers, which control about 90 per cent of the market, showed.

Petrol demand had risen by close to 9 per cent in May.

Diesel saw a 4.8 per cent 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 per cent in April and 2 per cent in the following month.

Diesel, the lifeline of transport and rural agri economy, saw a just 2 per cent 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 (IMD) 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 per cent lower than 1.5 million tonnes consumption during May 1-15. Its consumption was up 7 per cent when compared with the same period in June 2023 and 30 per cent higher from Covid-restriction period in June 2021.

On the other hand, diesel demand was 5.2 per cent lower when compared to consumption in June 1-15, 2023 and 3.1 per cent below the first half of May 2025. It however was 9.5 per cent 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 (ATF) consumption grew 3.1 per cent to 328,900 tonnes in June 1-15 this year. ATF sales were 8.4 per cent higher than consumption in May 1-15, 2023 and 12 per cent over June 1-15, 2021. Month-on-month, ATF consumption was however nearly 2 per cent lower.

LPG continued to be in the fast lane with 4 per cent 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 (CAGR) of 37 per cent.

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