India’s transportation fuel demand growth is expected to slow sharply in the second half of 2026, with multiple factors weighing on mobility and consumption, according to energy analysts. Both outlets cite government-led fuel conservation efforts alongside higher retail prices for petrol and diesel, which oil companies raise as international crude prices remain elevated. Since May 15, petrol and diesel prices have been increased by about Rs 5 per litre each across three instalments, reflecting partial pass-through of higher global oil costs to consumers. The reports also point to a weakening rupee, which contributes to the pressure on foreign exchange reserves and can worsen the impact of higher import costs. In parallel, Prime Minister Narendra Modi has urged citizens and government departments to conserve fuel, support remote work and cut non-essential travel as energy prices strain economic balances. Analysts say these combined influences are likely to dampen refined products demand growth. One report notes a downward revision to India’s 2026 refined products demand growth forecast by roughly 77,000 barrels per day (kbd), reflecting expectations of a slower demand trajectory in late 2026.
India’s H2 2026 fuel demand growth expected to slow on price hikes and austerity
India’s transportation fuel demand growth is expected to slow sharply in the second half of 2026, with multiple factors weighing on mobility and consumption, according to energy analysts. Both outlets...
- India’s transportation fuel demand growth is expected to slow sharply in H2 2026.
- Petrol and diesel prices are increased by about Rs 5 per litre each across three instalments since May 15.
- Government fuel conservation measures, including encouragement of remote work and reduced non-essential travel, are cited as drivers of weaker demand.
- Elevated crude oil prices and a weakening rupee are cited as contributing to higher costs and reduced mobility.
- Analysts revise down demand growth forecasts for 2026, including a reduction of about 77,000 bpd for refined products.
India's transportation fuel demand growth is set for a sharp slowdown in late 2026. Higher prices, government conservation efforts, and a weakening rupee are impacting mobility. Analysts have significantly cut growth forecasts, with petrol demand facing the steepest decline due to reduced commuting and discretionary travel.
3 months agoIndia's transportation fuel demand growth is expected to slow sharply in the second half of 2026 as government-led fuel conservation measures, elevated crude oil prices and a weakening rupee weigh on mobility and consumption trends, according to energy analysts. Petrol and diesel prices have been hiked by about Rs 5 per litre each in three instalments since May 15 as oil companies passed on a part of soaring international oil prices to consumers. The price hikes came just as Prime Minister Narendra Modi urged citizens and government departments to conserve fuel, encourage remote working and reduce non-essential travel as elevated energy prices pressure foreign exchange reserves and threaten to widen the current account deficit. This together with higher prices is likely to have a sobering impact on fuel demand growth. A report by Elif Binici, Lead Analyst (Modeling) at Kpler, revised down India's 2026 refined products demand growth forecast by about 77,000 barrels per day (kbd), or
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