The demand for refined petroleum products in India — the world’s fourth largest refiner — is expected to grow at a compound annual growth rate (CAGR) of more than 5 per cent over the next five years.

Industry chamber PHDCCI in a report said: “India’s petroleum products demand is forecast to increase by a CAGR of 5.37 per cent during 2025-2030 period.”

The demand for POL (Petroleum Oil & Lubricants) products will be primarily driven by the manufacturing and transportation sectors (both land and air) through 2030, it added.

“Light Diesel Oil (LDO), Petrol, aviation turbine fuel (ATF), and Petroleum Coke lead the demand spurt by 8.64 per cent, 8.23 per cent, 8.01 per cent and 7.52 per cent, respectively.

The industry chamber pointed out that India’s primary energy consumption grew at a CAGR of 4.2 per cent between 2013 and 2023. 

“Given India’s economic growth in the manufacturing sector and rising per capita income, energy demand in India is slated to increase at a CAGR of 6 per cent in the next decade according to our estimates,” it added.

As per the Petroleum Planning and Analysis Cell (PPAC), jet fuel and natural gas consumption are expected to grow at almost 10 per cent annually in FY26 — the highest among all refined petroleum products.

India’s aviation turbine fuel (ATF) consumption is likely to grow by 9.82 per cent in FY26 to 9.95 million tonnes (mt) in FY26. Natural gas usage is projected to rise by 10 per cent year-on-year (y-o-y) to 61.37 mt.

Earlier this month, the International Energy Agency (IEA) in a report said that India’s stellar expansionary trajectory will continue essentially unabated, with GDP growth averaging 6.4 per cent over the forecast period. 

“This is the highest by far of any major economy, propelled by structural advantages such as an expanding middle class with growing spending power and young population dynamics,” it added.

Additionally, improved infrastructure will help to boost mobility and car ownership. Oil demand will grow at a relatively fast rate as changing spending patterns, urbanisation and industrialisation make India’s economy more energy intensive, it pointed out.

India’s oil demand will increase by a steep 1 million barrels per day (mb/d) over 2024-2030, more than any other country, in the wake of stellar GDP expansion, at an average annual rate of 2.8 per cent, IEA noted.

“Moreover, while all key products will contribute to the expansion, transport fuels will lead the gains — a global anomaly. In relative terms, jet/kerosene will rise the fastest, at almost 6 per cent annually,” it said.

A similar dynamic propels annual gasoline demand growth of 4 per cent, which has significant scope for expansion given low levels of car ownership, it added.

Published on June 27, 2025