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New Delhi
The annual rate of growth of key auto fuels, diesel and petrol, is expected to slow down in the next financial year, beginning April 2024, according to the latest projections by the Petroleum Planning and Analysis Cell (PPAC).
According to PPAC’s original estimate for FY25, India’s diesel consumption, which accounts for more than 40 per cent of the refined petroleum products consumption, is expected at 92.44 million tonnes (MT), a growth of 2.67 per cent compared to FY24. PPAC’s revised estimate for FY24 puts diesel usage at 90.04 MT.
Growth rate
Compared to this, diesel consumption in FY24 rose to 4.82 per cent from 85.90 mt in FY23. The annual growth rate of the key transport fuel in FY23 was even steeper at 12.10 per cent, compared to 76.66 mt in the Covid-impacted FY22.
FY23 is the only year in more than two decades where diesel consumption grew in double digits — the highest so far both in terms of quantity and growth rate.
Moreover, the consumption of diesel on a decadal scale is also showing signs of softening. For instance, domestic consumption stood at 3.1 mt in March 2003, from which it doubled in a decade hitting around 6.2 mt in March 2013. However, in the span of the next 10 years, the consumption is at 7.8 mt in March 2023.
Similarly, petrol consumption in FY25 is projected to grow by 5.40 per cent to 39.21 mt. This is against an annual growth rate of 6.35 per cent in FY24. PPAC pegs gasoline usage in the current financial year at 37.20 MT. In FY23, petrol consumption grew by 13.4 per cent from 30.85 mt in FY22.
The consumption of aviation turbine fuel (ATF) follows a similar story. PPAC estimates that ATF usage will grow by 7.9 per cent in FY25 to hit 9 mt, which is lower than the annual growth rate in FY24 (13 per cent). Airlines are estimated to consume 8.34 mt of jet fuel in the current fiscal year.
Surge in consumption
In FY23, jet fuel consumption surged by a whopping 47.6 per cent to 7.38 mt from 5 mt in FY22. This is on a lower base in FY22 as airlines was one of the most impacted industries during the Covid pandemic.
During the April-December period in FY24, the consumption of diesel, petrol and ATF stood at 66.76 mt, 27.77 mt and 6.07 mt, respectively.
The consumption of auto fuels and jet fuel was record high due to a low base in the Covid-impacted FY22. It is more like a correction in FY24 and FY25, a senior oil marketing company (OMC) executive explained.
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