Petrol and diesel demand expected to slow due to economic pressure and fuel hikes

Due to high crude oil prices, a weak rupee, and government fuel-saving drives, demand for petrol and diesel in India is expected to decline. The energy analytics firm Kpler has reduced its projected fuel demand growth rate in 2026 by 39%. The cost of transportation has increased by 19% owing to the situation in Iran. This might influence government expenditure and prices in the market.

In addition, Kpler has also reduced its projections regarding India's refined product demand growth in 2026. The revised figure stands at approximately 78,000 barrels per day from 128,000 barrels per day. The demand growth rate projection for the petrol sector has been reduced from 63,000 barrels per day to 38,000 barrels per day. Experts believe that rising fuel prices and economic pressures may lead people to reduce non-essential travel.

The report states that increased work from home, a decrease in non-essential travel, and the government's fuel-saving campaign will directly impact diesel and petrol demand. Annual diesel demand is expected to decline by approximately 20,000 barrels per day. Furthermore, demand for aviation fuel (ATF) is also estimated to decline by approximately 50 percent. According to experts, due to the international situation and high oil prices, people are trying to reduce travel expenses.