Piped gas demand rises as India's LPG sales fall; petrol, diesel consumption jumps in July

In July, piped natural gas (PNG) demand surged in India as commercial and industrial consumers switched away from liquefied petroleum gas (LPG), leading to a significant decrease in LPG sales. Meanwhile, petrol and diesel consumption at the country's three state-owned fuel retailers saw robust growth, primarily due to delayed monsoon rains that increased irrigation demand and sustained road transport activity.

Indian Oil Corporation (IOC), Bharat Petroleum Corporation Ltd (BPCL), and Hindustan Petroleum Corporation Ltd (HPCL) recorded a 9.7 percent increase in combined petrol sales to 3.45 million tonnes in July, up from 3.14 million tonnes in July 2024. This growth was 15.1 percent higher than July 2024 and 36.1 percent above July 2023 levels. However, petrol sales declined by 1.1 percent month-on-month, falling to 3.48 million tonnes from 3.48 million tonnes in June.

Diesel sales experienced an even more substantial rise, increasing by 10.7 percent year-on-year to 7.12 million tonnes in July. This surge was driven by farmers relying more on diesel-powered pumps during the peak sowing season due to delayed monsoon rains. Diesel consumption in July was 11.5 percent higher than in July 2024 and 12.7 percent above July 2023 levels. Nevertheless, July diesel sales were 9.2 percent lower than June's 7.85 million tonnes.

Aviation turbine fuel (ATF) sales also saw a modest 2.9 percent growth, reaching 659,900 tonnes in July. This was 2.3 percent higher than July 2024 and 16.5 percent above July 2023. ATF sales saw a 4.6 percent decline month-on-month, falling to 691,700 tonnes from 691,700 tonnes in June.

Conversely, LPG consumption continued to weaken, dropping 17.4 percent to 2.37 million tonnes in July. The decline was mainly attributed to a shift by some consumers towards PNG, following supply disruptions caused by the West Asia crisis. Despite LPG demand recovering 8.6 percent month-on-month to 2.18 million tonnes in June, overall consumption remained below year-earlier levels as several industrial and commercial users persisted in using PNG instead.

July LPG sales were 13.3 percent lower than the July 2024 level of 2.73 million tonnes and 1.1 percent below the July 2023 figure of 2.39 million tonnes, indicating a persistent shift in fuel usage across commercial and industrial sectors.