India’s Diesel Demand Growth Slows Amid Economic and Weather Challenges

India’s diesel demand growth has remained muted, according to Arun Kumar Singh, Chairman and Managing Director of Oil and Natural Gas Corporation (ONGC). Despite the country’s insatiable energy appetite, factors such as global geopolitical uncertainties, trade restrictions, and seasonal fluctuations have contributed to a slowdown in diesel consumption. Singh emphasized that while India’s overall oil demand remains robust, diesel growth has been constrained by artificial limitations in energy flow and external market conditions.

The first half of FY25 saw only a 1% increase in diesel demand, reaching 44.4 million tonnes, as heavy monsoon rains disrupted transportation and agricultural activities. However, industry experts anticipate a recovery in diesel consumption from October onwards, driven by the end of the monsoon season and the start of crop harvesting. Singh also highlighted ONGC’s strategic partnership with BP to enhance domestic oil production, particularly from Mumbai High, which is expected to improve supply dynamics.

*Key Highlights:*
- Diesel demand growth remained subdued, with only a 1% rise in the first half of FY25.
- Monsoon disruptions affected transportation and agricultural consumption.
- Analysts expect diesel demand recovery post-monsoon season, starting October.
- ONGC's strategic alliance with BP aims to enhance domestic oil production.
- Broader market trends continue to influence India's energy consumption.

Source Names: CNBC-TV18, Business Standard, Reuters.