India's fuel demand growth might fall 39% in H2 2026
What's the story
India's fuel demand growth is expected to slow down significantly in the second half of 2026. The slowdown is mainly due to government-led conservation measures, high crude oil prices, and a depreciating rupee. These factors are expected to impact mobility and consumption trends across the country. The report from Kpler highlights a major revision in India's refined products demand forecast for 2026, with an estimated reduction of about 39%.
Impact
Oil companies have hiked fuel prices by ₹5 per liter
Oil companies have hiked petrol and diesel prices by around ₹5 per liter in three installments since May 15. This is in line with the rising international oil prices. Prime Minister Narendra Modi has also urged citizens to conserve fuel, work from home, and avoid non-essential travel, amid high energy costs affecting foreign exchange reserves and possibly widening the current account deficit.
Demand revision
Demand growth forecast revised downwards
The Kpler report, authored by Elif Binici, Lead Analyst (Modeling), has revised India's 2026 refined products demand growth forecast downwards by some 77,000 barrels per day (kbd), or 39%. The new estimate stands at around 78 kbd as against an earlier projection of 128 kbd. The revision is mainly due to a weaker expected growth in petrol and diesel consumption amid higher costs and weaker mobility trends.
Consumption forecast
Diesel and jet fuel demand growth cut down
The Kpler report highlights a steep downside risk for petrol demand, with growth projected to undershoot the earlier estimate by 25 kbd. This is mainly due to weaker commuting activity, slower discretionary travel, and government fuel-saving campaigns. Diesel demand growth has also been cut by around 20 kbd, while jet fuel demand growth has been revised down nearly 50% to about six kbd from an earlier projection of 11 kbd.