India witnessed a notable decline in fuel consumption during May as higher energy costs, supply constraints and uncertainty in global oil markets dampened demand across several petroleum products. Fresh data released by the Petroleum Planning and Analysis Cell showed that total petroleum product consumption fell compared to the same period last year, highlighting the pressure that volatile international energy markets are placing on domestic consumers and industries.
The decline comes at a time when global energy markets continue to grapple with disruptions linked to geopolitical tensions in West Asia, which have raised concerns about crude oil supplies and transportation routes critical to the world’s energy trade.
LPG and naphtha record steepest declines
According to NDTV, the most significant drop was recorded in liquefied petroleum gas consumption, which fell sharply during May. Demand for naphtha also witnessed a substantial decline as supplies were increasingly redirected towards boosting LPG production.
Industry observers note that the shift reflects efforts to prioritise cooking fuel availability amid supply concerns. However, the diversion has also affected industrial demand, as naphtha remains an important feedstock for various manufacturing processes and petrochemical production.
The overall fall in petroleum product consumption suggests that consumers and businesses are responding to higher fuel costs by cutting back wherever possible.
Also Read | IMD issues twin weather alerts: Heavy rain to lash Northeast as heatwave keeps North India on edge
Petrol and diesel growth remains muted
According to NDTV, unlike LPG and naphtha, transport fuels managed to avoid a decline but still recorded subdued growth. Petrol consumption rose only marginally, while diesel demand remained largely restrained despite being the country’s most widely used transportation and industrial fuel.
Analysts attribute the slower growth to elevated diesel prices in bulk markets and higher retail prices at private fuel outlets. These factors have encouraged more cautious fuel usage among transport operators, businesses and consumers.
Aviation turbine fuel demand also remained largely unchanged as airlines continued to manage operations carefully amid rising operating costs and fuel price volatility.
Also Read | El Niño returns: India may face hotter months and weaker monsoon, weather agencies warn
Global tensions continue to influence energy markets
According to NDTV, the weakness in domestic fuel demand coincides with continued instability in international oil markets. Concerns over shipping routes through the Strait of Hormuz and broader supply disruptions have kept traders and governments on alert for months.
Although tanker traffic has gradually recovered, industry experts believe the effects of earlier disruptions continue to ripple through global supply chains. Energy markets remain sensitive to geopolitical developments, resulting in frequent fluctuations in crude oil prices.
For India, one of the world’s largest oil importers, prolonged volatility presents a challenge. Higher import costs can translate into increased fuel prices, affecting transportation, manufacturing and household budgets.
