Why is the demand for diesel continuously decreasing in India? Demand is lowest after the Corona epidemic, what is the reason?

Diesel Demand Growth: The demand for diesel in India increased by only 2 percent in the financial year 2024-25. This is the lowest growth rate since the Corona epidemic. Electric vehicles (EVs) are a big reason behind this.

Diesel Demand Growth: The demand for diesel in India was the lowest since the Corona epidemic in the financial year 2024-25. It has increased by only 2 percent. The reason behind this decline in the demand for diesel is the low economic growth and the transition towards electric vehicles (EV).

The demand for diesel is gradually decreasing

Although diesel has always dominated the transportation sector, but at present public transport and logistics are also adopting EVs. In such a situation, the scope of electric vehicles is continuously increasing.

According to data from the Petroleum Planning and Analysis Cell (PPAC) of the Ministry of Oil, diesel consumption has increased by 2 percent to 91.4 million tonnes in FY 2024-25. This growth rate is much lower than the growth rate of 4.3 percent in the previous financial year and a small fraction of the strong growth rate of 12.1 percent in FY 2022-23. However, diesel still accounts for about 40 percent of total oil consumption in India, reflecting the level of economic activity in various sectors.

Ever-growing scope of EVs

Industry experts believe that the growing popularity of EVs is affecting the demand for diesel in India to a great extent. Even though diesel fuels three-fourths of the country's transportation sector, its demand has been low due to the transition to EVs. This growth is also less than that of petrol because commercial vehicles are also now gradually turning to EVs.

Electric buses are running on the roads in cities like Mumbai and Delhi. E-auto-rickshaws have already taken over many tier-2 and tier-3 cities. In such a situation, the demand for diesel in public transportation in cities has reduced. Apart from this, many big companies like Amazon, Flipkart and BigBasket are also making deliveries through electric vehicles. People are adopting EVs in their vehicles. This has also reduced the demand for diesel in the logistics sector.