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India Petroleum Consumption Falls 65 Percent In May Amid LPG Curbs And Supply Concerns
India's petroleum product consumption declined 6.5% year-on-year to 19.93 million tonnes in May 2026, driven largely by a sharp fall in LPG demand following government demand-management measures and higher global energy prices. Petrol and diesel consumption, however, continued to grow, reflecting resilient mobility demand despite elevated fuel costs.
By Finblage Editorial Desk
11:46 am
10 June 2026
India's consumption of petroleum products declined by 6.5% year-on-year to 19.93 million tonnes in May 2026 from 21.3 million tonnes in the corresponding month last year, according to data released by the Petroleum Planning and Analysis Cell (PPAC).
The decline was primarily attributed to lower LPG consumption amid government-imposed demand management measures and supply disruptions linked to tensions in West Asia. Industry sources indicated that rising fuel prices and tighter global energy markets also contributed to weaker overall demand.
LPG consumption fell sharply by 20.5% to 2.13 million tonnes in May compared with 2.68 million tonnes a year earlier. The decline comes as India seeks to manage domestic LPG supplies following disruptions to imports caused by the closure of the Strait of Hormuz. Indian refiners have been directed to maximise LPG production to offset supply shortages.
The government has also implemented measures to moderate LPG demand, including increasing the minimum refill booking interval from 21 days to 25 days in urban areas and up to 45 days in rural regions. Additionally, the number of subsidised LPG cylinders available annually under the Pradhan Mantri Ujjwala Yojana (PMUY) has been reduced from nine to four as international LPG prices continue to rise. According to the oil ministry, state-run oil marketing companies are currently incurring under-recoveries of approximately ₹700 per LPG cylinder.
In contrast, transportation fuel demand remained resilient. Petrol consumption increased 3.4% year-on-year to 3.9 million tonnes in May, while diesel demand rose 1.6% to 8.7 million tonnes, indicating continued growth in personal and commercial mobility despite elevated retail fuel prices.
Consumption of Aviation Turbine Fuel (ATF) remained largely stable at 783,000 tonnes during the month. Meanwhile, industrial fuel demand weakened, with naphtha consumption declining 29.4% year-on-year and bitumen demand falling 39.4%, reflecting softer activity in petrochemicals and road construction.
The slowdown was also visible in external markets. India's exports of refined petroleum products declined to 937,000 barrels per day in May, down 3.6% from the previous month, according to data from commodity analytics firm Kpler.
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