India’s Fuel Demand Growth Expected to Drop 39% in 2026 Amid Rising Prices, Rupee Weakness and Conservation Push
मुख्य बातें
- •India’s 2026 refined fuel demand growth forecast slashed by 39% to 78 kbd due to higher prices and policy shifts.
- •Petrol demand growth revised down by 25 kbd; diesel and jet fuel also lowered amid reduced mobility and spending.
- •Rupee has weakened nearly 6% since US–Iran conflict escalation, increasing inflationary pressure and eroding purchasing power.
- •State-run fuel retailers lost nearly Rs 1,000 crore daily before price hikes, as import costs outpaced retail prices.
India’s transportation fuel demand growth is projected to decelerate significantly in the second half of 2026, with analysts citing rising fuel prices, government conservation policies, and a weakening rupee as key headwinds. According to a new report by Kpler’s lead analyst (modelling), Elif Binici, the country’s 2026 refined products demand growth has been revised downward by 77,000 barrels per day (kbd)—a 39% reduction—bringing the forecast down to 78 kbd from the earlier estimate of 128 kbd.
The downgrade reflects weaker-than-expected growth in petrol and diesel consumption, driven by elevated fuel costs, softer mobility trends, and official fuel-saving campaigns amid the ongoing crisis in West Asia. Since May 15, petrol and diesel prices have risen by approximately Rs 5 per litre in three installments, as oil marketing companies passed on part of the surge in global crude oil prices to consumers. The average petrol price now stands near Rs 103 per litre, still well below the estimated breakeven level of nearly Rs 125 per litre, while diesel prices are around Rs 94 per litre, below the breakeven range of Rs 115–120 per litre.
