Diesel consumption grew 2% to 91.4 million tonnes in the 2024-25 (April 2024 to March 2025) fiscal, according to interim data released by the Petroleum Planning and Analysis Cell (PPAC) of the Oil Ministry.
Diesel Demand Slows to 2% Growth in FY2024-25
Growth in diesel consumption—the backbone of India’s transport and agriculture sectors—has slowed to its lowest rate since the pandemic, rising just 2% to 91.4 million tonnes in the fiscal year 2024-25, according to provisional data from the Petroleum Planning and Analysis Cell (PPAC) under the Ministry of Oil.
This marks a significant drop from 4.3% growth in 2023-24 and 12.1% in 2022-23, reflecting a shift in the country’s economic and energy landscape.
Economic and Technological Shifts Behind the Slowdown
While slower economic expansion played a role, the more notable factor is the growing impact of electric vehicles (EVs) across sectors. Diesel, which makes up around 40% of India’s petroleum consumption, is beginning to lose ground to cleaner, more sustainable alternatives.
Industry insiders report that although diesel still fuels around 75% of India’s transport sector, its dominance is being chipped away by the widespread adoption of electric alternatives, especially in urban and semi-urban regions.
Also read: Bank of India cuts home loan interest rates following RBI’s repo rate reduction
EVs Reshape Urban Transport and Logistics
- Electric buses are becoming commonplace in major cities like Delhi and Mumbai, directly replacing diesel-run fleets.
- E-rickshaws have taken over in tier-2 and tier-3 cities, dominating short-distance urban transit.
- Major companies like Amazon, Flipkart, and BigBasket are transitioning their delivery vehicles—mainly diesel vans and LCVs (Light Commercial Vehicles)—to EVs, leading to a noticeable decline in diesel demand in logistics.
Other Fuels Show Stronger Growth
While diesel growth slows, other fuel types are seeing robust demand:
- Petrol consumption surged 7.5% to 40 million tonnes
- LPG demand climbed 5.6% to 31.32 million tonnes
- Jet fuel usage rose nearly 9%, reaching 9 million tonnes, driven by the aviation sector’s strong recovery
Conversely, naphtha usage dropped 4.8% to 13.15 million tonnes, and fuel oil demand fell nearly 1% to 6.45 million tonnes, reflecting changing industrial fuel preferences.
A Long-Term Shift in Motion
India’s energy consumption patterns are clearly in transition. As electrification gathers pace—especially in transport and logistics—diesel’s once-unshakable dominance appears to be on a steady decline. While it remains a critical component of the energy mix today, the writing on the wall suggests that its peak may already be behind us.
