India’s June Fuel Consumption Sees Seasonal Decline

India’s fuel consumption in June 2025 declined by 4.7 per cent compared to May. This drop reflects typical seasonal trends linked to the monsoon period. Despite the monthly fall, fuel demand rose 1.9 per cent compared to June last year. India remains the world’s third-largest oil consumer and importer. The latest data from the Petroleum Planning and Analysis Cell offers vital information about the country’s energy use patterns amid global uncertainties.

Overall Fuel Demand Trends

India consumed 20.31 million metric tonnes of fuel in June 2025. This was down from May’s figures but higher than June 2024. Seasonal factors such as the monsoon typically reduce fuel usage during this period. The downward monthly trend is expected to continue until August or September, aligning with historical consumption patterns.

Petrol and Diesel Consumption

Petrol sales fell by 6.9 per cent month-on-month to 3.52 million tonnes. However, petrol demand was 6.7 per cent higher than the previous year. Diesel consumption rose modestly by 1.6 per cent year-on-year to 8.11 million tonnes. Diesel remains a critical fuel for transportation and industry, supporting steady growth despite seasonal dips.

LPG, Naphtha, and Bitumen Sales

Liquefied petroleum gas (LPG) sales declined 4.9 per cent compared to May, totalling 2.53 million tonnes. Naphtha sales increased by 3 per cent month-on-month to 1.03 million tonnes. Yearly sales of LPG and naphtha rose by 9.1 per cent and 2 per cent respectively. Bitumen sales, vital for road construction, dropped sharply by 16 per cent in June, reflecting reduced infrastructure activity during monsoon.

Seasonal Impact and Economic Context

The monsoon season influences fuel demand in India. Rainfall reduces road travel and construction work, lowering fuel consumption. Despite this, India’s services sector recorded its strongest growth in ten months in June 2025. This growth was driven by rising demand and easing inflationary pressures. The government remains alert to global risks after US strikes on Iran’s nuclear sites, which threaten oil supply stability.

Government Measures and Global Risks

India’s oil minister announced plans to secure domestic fuel supplies amid rising geopolitical tensions. The Middle East remains a critical source of oil and gas for India. Disruptions in this region could push global energy prices higher. India’s proactive stance aims to mitigate supply shocks and ensure energy security for its growing economy.

Future Outlook

Fuel demand is expected to rise after the monsoon season ends. Economic recovery and increased industrial activity will support higher consumption. Monitoring global political developments will remain crucial for India’s energy strategy. Seasonal patterns and government policies will shape demand trends in the coming months.

Questions for UPSC:

1. Taking example of India’s fuel consumption trends, discuss the impact of seasonal variations on energy demand in developing economies.
2. Examine the role of geopolitical tensions in the Middle East on global oil prices and energy security of importing nations.
3. Analyse the significance of diversified energy sources in India’s energy policy and how it affects economic growth and environmental sustainability.
4. Discuss in the light of India’s monsoon season, how climatic factors influence infrastructure development and industrial activities.

Answer Hints:

1. Taking example of India’s fuel consumption trends, discuss the impact of seasonal variations on energy demand in developing economies.

1. Monsoon season causes reduced transportation and construction activities, lowering fuel demand.
2. Seasonal agricultural cycles affect energy use in rural and semi-urban areas.
3. Demand typically peaks before and after monsoon due to increased industrial and transport activity.
4. Energy consumption shows predictable seasonal dips, aiding in resource planning.
5. Developing economies with large agrarian sectors face similar seasonal demand fluctuations.
6. Seasonal demand shifts impact government revenue from fuel taxes and energy imports.

2. Examine the role of geopolitical tensions in the Middle East on global oil prices and energy security of importing nations.

1. Middle East supplies share of global crude oil, crucial for many countries including India.
2. Geopolitical conflicts can disrupt supply chains, causing price volatility worldwide.
3. Energy-importing nations face risks of supply shortages and inflationary pressures.
4. Strategic reserves and diversification are essential to mitigate supply risks.
5. Price spikes affect economic growth, inflation, and trade balances in importing countries.
6. Diplomatic efforts and international cooperation aim to stabilize supply and prices.

3. Analyse the significance of diversified energy sources in India’s energy policy and how it affects economic growth and environmental sustainability.

1. Diversification reduces dependency on imported fossil fuels, enhancing energy security.
2. Incorporation of renewables (solar, wind) supports sustainable development goals.
3. Energy mix diversification lowers carbon emissions and environmental degradation.
4. Stable and affordable energy supply promotes industrial growth and investment.
5. Government incentives encourage clean energy adoption, reducing pollution.
6. Diverse energy portfolio buffers against global market shocks and price fluctuations.

4. Discuss in the light of India’s monsoon season, how climatic factors influence infrastructure development and industrial activities.

1. Heavy monsoon rains delay construction projects, reducing demand for bitumen and fuel.
2. Flooding and waterlogging disrupt supply chains and factory operations.
3. Seasonal labor availability fluctuates due to agricultural commitments during monsoon.
4. Industrial output slows down, impacting overall economic activity temporarily.
5. Planning and scheduling of infrastructure projects often avoid peak monsoon months.
6. Monsoon impacts transportation, affecting logistics and fuel consumption patterns.