Record High: India’s Fuel Use Is Soaring

Joseph Iyanu
India’s fuel consumption hit record highs in 2022-23, driven by surging transportation and refined product demands. Increased 10.2% YoY, with 222.3M tonnes.
Traffic on a major road in India. Photo: shivaphotographyy | Pixabay

According to the latest data released by the Petroleum Planning and Analysis Cell (PPAC) of India’s oil ministry,  The country’s petroleum consumption has reached a record high for the 2022-2023 financial year.

This unprecedented fuel consumption can be linked to the growing demand for transportation fuels and other refined products. 

Breaking All Previous Records

The consumption of major fuels, including diesel, petrol, and liquefied petroleum gas (LPG), surpassed all previous records in the year ended, March. India consumed a total of 222.30 million tonnes of petroleum products in 2022-23, marking a 10.2% increase year on year (YoY). 

The previous consumption record for petroleum products was 214.13 million tonnes in 2019-20. Demand dipped in 2020-21 due to the pandemic and slightly recovered in 2021-22. 

Refueling a car. Photo: Rudy and Peter Skitterians | Pixabay

However, the demand for most products in 2022-23 exceeded pre-COVID levels as various economic sectors fully recovered from the pandemic’s impact.

Fuel Consumption Breakdown

In 2022-23, India consumed 85.90 million tonnes of diesel, the country’s most-consumed fuel, which accounts for nearly 40% of its overall consumption of petroleum products. This was followed by petrol consumption at 34.98 million tonnes, marking a 13.4% increase YoY. 

LPG consumption also reached a new record at 28.50 million tonnes, despite only a 0.9% increase YoY.

Projections For 2023-24 And March Consumption Records

PPAC’s projections for the financial year 2023-24 show an expected increase in fuel consumption. Diesel consumption is also expected to rise to 90.56 million tonnes, while petrol consumption is estimated to reach 37.80 million tonnes. 

LPG consumption is also anticipated to rise to 29.12 million tonnes in the current financial year. The growing demand for diesel and petrol indicates robustness in the transportation and some industrial segments.

India broke several records in March 2023, with the overall consumption of petroleum products reaching 20.50 million tonnes in one month, its highest ever.

A crude oil refinery. Photo: Talpa | Pixabay

India consumed 7.80 million tonnes of diesel and 3.11 million tonnes of petrol during this month, marking a 5% YoY increase in the country’s overall petroleum product consumption.

Related: Scotland To Get Driverless Bus Service In May 2023

India’s Future Demand And Refining Capacity

Globally, India is the third largest crude oil consumer, which can be linked to its large population. The country has a refining capacity of 250 million tonnes per annum (MTPA), with plans to expand to 450 MTPA in the coming years. 

India’s fuel consumption will continue to rise with its economic growth. According to the International Energy Agency, the country’s oil demand could increase from 4.7 million barrels per day (bpd) in 2021 to 6.7 million bpd by 2030 and 7.4 million bpd in 2040.

Energy Security And Reliance On Imports

With over 85% of its crude oil requirements imported, India’s increasing fuel consumption places a strain on the country’s energy security. A growing reliance on imports exposes the nation to fluctuations in global oil prices and geopolitical risks. 

To address this issue, India is exploring alternative energy sources and investing in domestic oil and gas production to reduce its import dependence.

To address the rising fuel demand, India has been making substantial investments in clean energy, such as solar and wind power. The nation aspires to generate 40% of its power capacity from non-fossil fuel sources by 2030.

Wind energy farm. Photo: Brett Sayles | Pexels

Additionally, enhancing public transportation infrastructure, like metro rail networks and electric buses, is vital for controlling fuel consumption and fostering sustainable growth.

India’s soaring fuel consumption reflects the country’s rapid economic growth and industrialization. However, this growth also presents challenges in terms of energy security, environmental impact, and sustainability. 

The Indian government and private sector must collaborate to promote alternative energy sources, invest in clean energy infrastructure, and implement stricter fuel efficiency and emission standards to strike a balance between economic growth and environmental responsibility.


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