Electric Vehicles Drive Shift in India's Diesel Demand Landscape

The demand for diesel in India has decreased due to slower economic growth and a shift towards electric vehicles (EVs). Diesel consumption grew by only 2% in the recent fiscal year, highlighting the trend towards cleaner fuel sources and the impact of EV adoption on petroleum product consumption.

Diesel demand in India, the most consumed petroleum product, has seen its lowest growth since the pandemic as economic expansion slows and a shift towards cleaner fuels takes center stage.

According to the Petroleum Planning and Analysis Cell (PPAC) of the Oil Ministry, diesel consumption increased by a mere 2% in the 2024-25 fiscal year, reflecting a gradual migration towards electric vehicles (EVs).

The rise of electric buses in major cities and adoption of e-rickshaws in smaller towns are significantly influencing diesel’s role in transportation, contributing to a broader trend affecting the logistics sector and public transport, as companies transition to EV fleets.