- Petrol, diesel consumption rise y-o-y despite decline in overall POL demand
- Petcoke consumption drops 29% y-o-y amid tighter availability, higher prices
India’s petroleum product consumption fell 2.8% y-o-y to 18.61 mnt in August 2026, but the headline decline masks sharply divergent trends across the country’s energy market.
Petrol and diesel consumption continued to grow strongly from a year earlier, while much of the overall contraction came from products, including LPG, naphtha and petroleum coke.
For energy markets, the distinction is important: the data do not point towards a broad-based weakening of Indian energy demand. Instead, transport fuels remain resilient while some industrial fuels — particularly petcoke — are being constrained by tighter supply and higher prices.
Transport fuels buck overall decline
India consumed 18.61 mnt of petroleum products in August, down from 19.14 mnt a year earlier and 19.87 mnt in July.
High-speed diesel (HSD), India’s largest petroleum product, fell sharply m-o-m to 7.02 mnt from 8.09 mnt, reflecting in part the seasonal slowdown associated with the monsoon.
However, diesel consumption remained 6.8% higher y-o-y.
Petrol demand was similarly resilient, increasing 8.2% y-o-y to 3.84 mnt and edging above July’s 3.82 mnt.
Petrol and diesel together accounted for around 58% of India’s petroleum product consumption in August. Their continued y-o-y growth therefore suggests that road mobility, freight and associated economic activity remain relatively firm despite the fall in aggregate consumption.
Apr-Aug demand shows similar divergence
The five-month comparison reinforces this picture.
India consumed 96.16 mnt of petroleum products during April-August 2026, down around 3.9% y-o-y from 100.07 mnt in the same period last year.
But diesel consumption increased 4.8% y-o-y to 40.77 mnt, while petrol rose around 7% to 19.03 mnt.
The contraction was concentrated elsewhere. LPG demand fell nearly 17% y-o-y during April-August, naphtha declined around 15%, while petcoke consumption dropped by almost 23%.
The aggregate decline therefore masks considerably stronger consumption across India’s two largest transport fuels.
Petcoke decline reflects tightening supply, not simply weaker demand
For coal and industrial fuel markets, petcoke provides perhaps the most significant signal.
Consumption fell to 1.60 mnt in August from 2.24 mnt a year earlier, a decline of almost 29%. April-August consumption dropped to 6.82 mnt from 8.84 mnt, down nearly 23%.
However, the decline should not necessarily be interpreted as evidence of weakening underlying industrial energy requirements.
Global petcoke availability has tightened, lifting seaborne prices and subsequently domestic Indian prices.
BigMint’s US 6.5% sulphur petcoke assessment delivered into Kandla averaged around $145/t during August, almost 30% higher y-o-y.
Higher prices and reduced availability have made imported material increasingly difficult for price-sensitive consumers to absorb. India’s petcoke imports consequently fell to around 0.6 mnt in August, nearly 68% lower y-o-y.
Could thermal coal benefit?
The petcoke trend has direct implications for India’s thermal coal market.
Cement producers and some other industrial consumers have varying degrees of flexibility between petcoke and coal, depending on plant configuration, calorific value, sulphur tolerance and delivered fuel economics.
Lower petcoke consumption therefore does not necessarily mean the underlying requirement for thermal energy has disappeared.
Instead, part of that energy requirement may migrate towards alternative fuels, creating potential incremental demand for domestic or imported thermal coal where relative economics permit.
This becomes particularly relevant at a time when India’s power sector is itself consuming coal heavily, potentially increasing competition between utilities and non-power consumers for domestic coal and rail logistics.
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