India's fuel market shows split trend: Monthly uptick, annual decline Amid Hormuz disruptions

India’s fuel consumption rose in May compared with the previous month but remained lower on an annual basis, with mixed trends across major petroleum products, according to data from the Petroleum Planning and Analysis Cell (PPAC) of the oil ministry. 

Total fuel consumption stood at 19.93 million metric tonnes in May, up from 19.47 million tonnes in April, but down 6.5% compared with the same month last year, Caliber.Az reports via foreign media.

Liquefied petroleum gas (LPG) consumption continued to decline, falling around 20% year-on-year to 2.13 million tonnes. The drop comes amid what industry participants have described as a severe LPG supply crunch in decades, linked to shipping disruptions in the Strait of Hormuz during the US-Israel conflict with Iran. India imports around 90% of its LPG, largely from Middle Eastern suppliers.

Fuel usage patterns were uneven across transport fuels. Gasoline sales fell 6.1% month-on-month and 3.4% year-on-year, while diesel consumption rose 4.8% from April and 1.6% compared with a year earlier.

State-owned fuel retailers raised diesel prices by 2.71 rupees ($0.0283) per litre and petrol by 2.61 rupees during May, marking the fourth price increase of the month, according to dealers. The adjustments were aimed at offsetting higher crude costs.

Other petroleum products also showed weakness. Naphtha sales declined 29% year-on-year, while bitumen consumption dropped 32% month-on-month and about 39% annually, reflecting reduced demand in industrial and road construction activity. Fuel oil usage, however, increased by about 24% year-on-year.

The broader demand picture points to a potential slowdown in fuel consumption growth in 2026, with analysts citing higher energy costs linked to geopolitical tensions in the Middle East.