Diesel Mumbai/IBNS: India's diesel market is showing signs of a slowdown as demand growth loses steam, raising concerns for the world's third-largest oil importer, reports Bloomberg.
As per the report, this shift comes amid slower economic expansion and evolving consumption trends.
Preliminary data from India's oil ministry reveals that diesel sales, a fuel critical for trucks and agricultural machinery, remained flat in October at 7.64 million tons compared to the same month last year.
Over the first 10 months of 2024, diesel volumes grew by just 1.8 percent—the slowest rate since 2020, when pandemic restrictions curbed demand.
Diesel makes up about 40 percent of India's oil consumption, and the recent softening aligns with weak diesel demand in China and Europe.
This trend could impact global crude prices, which are already influenced by OPEC+ supply decisions, the upcoming US presidential election, and projections of a possible oil oversupply in 2025, according to Bloomberg.
In contrast, demand for other fuels in India showed a different trend.
Gasoline sales surged by 8.4 percent year-on-year (YoY) in October, reaching 3.4 million tons, while jet fuel consumption rose 8.6 percent to 751,000 tons, reports said.
Diesel demand is expected to grow by 2.2 percent for the full year and 2.5 percent in 2025, according to energy analytics firm Kpler.
Despite the deceleration, India remains one of the stronger performers among emerging markets, generally a positive factor for diesel demand.
However, India's GDP growth eased to 6.7 percent in the April-June quarter, marking the slowest expansion in five quarters.
Additionally, industrial production saw its first contraction in nearly two years in August.
In China, the world’s largest oil importer, diesel demand has declined as more trucks shift to liquefied natural gas, and the prolonged property sector slump persists.
Meanwhile, Europe’s diesel futures recently entered contango, signaling a bearish market with near-term prices lower than those for later delivery.
Support Our Journalism
We cannot do without you.. your contribution supports unbiased journalism
IBNS is not driven by any ism- not wokeism, not racism, not skewed secularism, not hyper right-wing or left liberal ideals, nor by any hardline religious beliefs or hyper nationalism. We want to serve you good old objective news, as they are. We do not judge or preach. We let people decide for themselves. We only try to present factual and well-sourced news.
