India's diesel consumption surged to its highest level in six months during November, driven by a reduction in the Goods and Services Tax (GST) and a robust uptick in festive season demand, according to the latest industry data released on Monday.
Diesel Demand Signals Economic Revival
Diesel sales, a key barometer of economic activity, increased by 4.7% to reach 8.5 million tonnes in November. This marks the most significant monthly growth recorded since May 2025. The transport sector, which is the largest consumer of diesel accounting for 40% of all fuel sales in the country, led this recovery. The farming and construction sectors are other major contributors to diesel demand.
Monsoon Slump and Festive Recovery
Prior to this rebound, diesel sales had witnessed a sequential decline for three consecutive months during the monsoon season. Heavy rains during this period typically disrupt the movement of goods and hamper farming and construction work, leading to lower fuel consumption. Demand began a tentative recovery in September as the rains receded, setting the stage for the festive season.
The pivotal boost, however, came from the government's decision to cut GST rates effective September 22. This policy move triggered a spike in demand for various goods, which in turn jump-started industrial and commercial activities across the nation, directly driving up the consumption of diesel.
Petrol, LPG, and Jet Fuel Also Show Growth
While diesel led the charge, sales of other fuels also posted positive growth in November. Petrol consumption continued its expansion, albeit at a more modest rate of a little over 2%, reaching 3.5 million tonnes. This sustained demand is partly attributed to record car sales in October, as more consumers opt for personal vehicle usage.
Liquefied Petroleum Gas (LPG) consumption saw a substantial rise of 7.6%, totaling nearly 3 million tonnes. This surge was largely powered by the addition of 25 lakh (2.5 million) new customers under the government's 'Ujjwala' subsidy scheme, which provides cooking gas connections to economically disadvantaged households.
Furthermore, the aviation sector showed signs of recovery, with jet fuel sales rising by 4.7% to 7,83,000 tonnes during the month under review. The collective upward trend across fuel types points towards a broad-based revival in economic and consumer activity following the monsoon lull.
