After Korona epidemic, there was a huge decline in diesel demand, what is the reason?

Diesel Demand Growth: Demand of diesel in India was the lowest since Korona epidemic in FY 2024-25. It has increased only 2 percent. There is a shortage of economic growth behind this decline in diesel demand and a transition leading to electric vehicles (EV).

Diesel demand is decreasing gradually

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

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

EV’s constantly increasing scope

Industry experts believe that the growing popularity of EV is affecting the demand for diesel in India to a great extent. Even though diesel provides fuel to the three-fourth part of the transportation sector of the country, but due to the transition towards EV, its demand has been less. This growth is also less than petrol because commercial vehicles are also slowly turning to EV.

Electric buses are running on the roads in cities like Mumbai and Delhi. E-auto-rickshaws have already occupied 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 delivering through electric vehicles. The people are adopting EV in vehicles. Due to this, the demand for diesel in the logistics sector has also reduced.

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