The Organisation of the Petroleum Exporting Countries or OPEC stated in a latest monthly update that India’s oil demand inched down by 19 thousand barrels per day (tb/d) or 0.3% in March, y-o-y, from growth of 42 tb/d, y-o-y, seen the previous month. The largest monthly decrease in oil product demand was recorded in the ‘other products’ category, which offset y-o-y growth in gasoline and LPG. Gasoline demand saw the largest growth, by 54 tb/d, y-o-y, in March, albeit remaining below the growth of 81 tb/d, y-o-y, observed in February. Gasoline consumption was supported by an increase in vehicle sales amid a rise in disposable income and personal mobility.
The outlook for the near term provides further positive signals for steady oil demand in India. Diesel is projected to continue to be the main driver of demand growth, followed by the ‘other products’ category, bitumen in particular. Additionally, robust growth in transport fuels, with strong expectations for manufacturing and growth in petrochemical feedstock requirements, is expected to support overall oil demand growth in 2Q25 to reach 235 tb/d, y-o-y. Overall, in 2025, oil product demand in India is expected to grow by 188 tb/d, y-o-y, to average 5.7 million barrels per day (mb/d).
OPEC noted that in 2026, ongoing trade-related negotiations are expected to reduce currently announced tariffs, limiting the impact in 2026. India’s economy is expected to continue expanding amid strong manufacturing and service sector activities, supported by a continuation of current government support in key sectors amid inflation easing. Accordingly, oil demand is projected to grow by 246 tb/d, y-o-y, to average 6.0 mb/d, supported by robust economic growth amid healthy transportation and manufacturing activities.