India’s fuel consumption fell by 6.5% in May from a year earlier while sales of liquefied petroleum gas (LPG), a key cooking and industry input fuel, tumbled by 20% as the Iran war continued to disrupt supply from the Middle East and drive India’s fuel prices higher.
Fuel consumption in India dipped by 6.5% last month from the same period of 2025, dragged down by lower gasoline sales, while diesel consumption inched up by 1.6%, according to official data from India’s oil ministry.
Gasoline consumption dipped by 6.1% in May compared to April, after Indian fuel retailers hiked prices at the pump four times last month, as supply from the Middle East remained squeezed and international crude prices rallied.
At the same time, consumption of LPG in India crumbled to 2.13 million tons in May, down by 20% compared to the same month in 2025, the oil ministry’s data showed.
LPG is a key energy source for Indian households, and stranded cargoes in the Middle East have strained the imported supply.
Around 60% of Indian households rely on LPG for their primary cooking fuel, and the blockage at the Strait of Hormuz, from where 90% of all Indian LPG imports pass, has been immediately felt by consumers.
In late April, India’s government urged local refiners to increase production of liquefied petroleum gas amid the supply crunch resulting from the war in the Middle East. The country has boosted imports of LPG from outside the Middle East, including record volumes from the U.S.
Fuel-conservation policies and rising fuel prices amid the crisis will drag demand growth materially lower, while India braces for accelerated inflation and further deterioration of its fiscal and current account balances amid the supply crisis.
Despite the materially lowered forecasts of fuel demand growth, analysts don’t see a China-like structural decline in consumption beginning in India.
By Michael Kern for Oilprice.com
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