India’s fuel consumption saw a decline in February 2025, primarily due to a shift towards alternative fuel sources such as electric vehicles (EVs) and compressed natural gas (CNG), according to a report by SBI Securities.
The report highlighted that petrol consumption in India fell to a 12-month low of 3.1 million metric tonnes (MMT) in February, marking a 5.4 per cent decline month-on-month (MoM). However, on a year-on-year (YoY) basis, petrol consumption was still 3.5 per cent higher compared to February 2024.
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Notably, this was the lowest petrol consumption recorded in the current financial year. The highest petrol consumption during the period was in May 2024, at 3.4 MMT.
The report said “Diesel demand continues to be impacted due to the shift in fuel mix towards alternative fuel sources such as EV, CNG etc. especially in the light commercial vehicle segment.”
Diesel consumption, which plays a crucial role in transportation and industrial activity, also declined. In February 2025, diesel consumption stood at 7.3 MMT, a 5.1 per cent drop MoM and 1.2 per cent lower YoY.
The data from the Petroleum Planning & Analysis Cell demand for high-speed diesel (HSD) had declined to the current 7.3 MMT consumption which is lowest since September when diesel consumption declined to 6.3 MMT.
The report attributed this decline to the increasing adoption of alternative fuels, particularly in the light commercial vehicle segment, where CNG and EVs are becoming more popular.
The data from the Petroleum Planning & Analysis Cell also highlighted that the consumption of aviation turbine fuel (ATF), which is used in air travel, also saw a six-month decline, reaching 7.3 MMT in February 2025.
The downward trend in fuel consumption highlights a gradual transition in India’s energy sector, where alternative energy sources are gaining traction.
Government policies promoting EV adoption, expanding CNG infrastructure, and rising fuel prices are encouraging consumers and businesses to explore more sustainable options.
The impact on government revenue from fuel taxes and the oil sector’s adaptation to these changes will remain key areas to watch in the coming months.
