Festival season, GST rationalisation boosts auto fuel demand in September
The consumption of diesel and petrol in the country was higher during September 2025 on an annual basis as festival season stocking, further boosted by GST rate cuts, lifted demand for the key auto fuels even as the month witnessed heavy monsoon rains.
According to the Petroleum Planning & Analysis Cell (PPAC), India’s diesel consumption rose by 2.9 per cent month-on-month (m-o-m) and 6.4 per cent year-on-year (y-o-y) to around 6.77 million tonnes (mt) on a provisional basis.
The consumption of petrol rose by roughly 7.5 per cent y-o-y to 3.39 mt last month. However, the usage fell by a little over 4 per cent on a monthly basis.
Since March this year, India’s consumption of diesel, petrol and jet fuel has been near record levels, with May hitting an all time high record. However, usage fell for three consecutive months during June to August 2025 as monsoon rains impacted mobility.
Industry sources said that the rationalisation of GST rates by the government with the intention to boost spending during the October-December festival and marriage season coupled with aggressive stocking boosted consumption of diesel during September, a month marked by heavy rains.
According to the weatherman, September rains were 15.3 per cent above normal with Central India, north west region and south peninsula recording surplus precipitation.
“GST rationalisation led to stockists booking higher quantities in advance to get GST benefits and pass them on to the consumer. September, anyways, is marked by some stocking activity ahead of the festival season. This time the activity was heightened. It is expected to boost volumes of diesel in October as well,” said an official with a domestic refiner.
Petrol usage was down M-o-M due to rains impacting personal mobility. However, annual usage is higher as the personal mobility segment is getting bigger as more people are buying four and two-wheelers, the official added.
India’s jet fuel consumption rose marginally by 0.7 per cent m-o-m to 7,16,000 tonnes during September 2025. However, the usage fell by 1.4 per cent on an annual basis. The consumption is largely on lines of the monsoon season as rains impact flights.
Industry chamber PHDCCI in a June 2025 report said the demand for refined petroleum products in India is expected to grow at a compound annual growth rate (CAGR) of 5.37 per cent till 2030.
The demand for POL (Petroleum Oil & Lubricants) products will be primarily driven by the manufacturing and transportation sectors (both land and air) through 2030. Light Diesel Oil (LDO), Petrol, aviation turbine fuel (ATF), and Petroleum Coke lead the demand spurt by 8.64 per cent, 8.23 per cent, 8.01 per cent and 7.52 per cent, respectively.
Published on October 2, 2025
