India’s August fuel demand drops to 11-month low – Markets

India’s fuel consumption in August hit an eleven-month low, slipping by 3.8% month-on-month to 18.73 million metric tons, oil ministry data showed on Monday.

Why it’s important

India is the world’s third-largest consumer and importer of oil. The data is a proxy for the country’s oil demand.

India is also the largest buyer of Russian seaborne crude, taking advantage of discounts on Russian oil as Europe and the U.S. have shunned those barrels over Moscow’s 2022 invasion of Ukraine.

By the numbers

Fuel demand in August rose 2.6% year-on-year to 18.73 million tons from 18.26 million tons a year earlier, but dropped month-on-month, data on the Petroleum Planning and Analysis Cell’s website showed. July demand stood at 19.46 million tons,

Sales of gasoline, or petrol, rose 1.4% to 3.54 million tons in August, compared with 3.49 million tons in July, and were up 5.4% from levels seen a year ago.

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Diesel consumption was down 10.7% on a monthly basis and totaled 6.58 million metric tons in August, but rose 1.2% year-on-year.

Cooking gas or liquefied petroleum gas sales increased 5.6% to 2.81 million metric tons year-on-year and remained near the same level asthe previous month, while naphtha sales fell 4.3% to 1.11 million metric tons on a yearly basis.

Sales of bitumen, used for making roads, were up 44.8% to 0.42 million metric tons year-on-year, while fuel oil use edged up 6.1% in August to 0.52 million metric tons.

Constext

India will continue to buy Russian oil as it proves economical, its finance minister said on Friday, despite the U.S. administration’s decision to impose heavy import tariffs on Indian goods due, in part, to its energy purchases from Moscow.

U.S. President Donald Trump’s doubled tariffs on imports from India to as much as 50% took effect as scheduled on August 27.

India is raising its liquefied natural gas import capacity by 27% to 66.7 million metric tons per year by 2030 by adding two more plants, oil minister Hardeep Singh Puri said in a post on social media platform X last week.