Festive demand drives India's diesel sales in October, data shows

NEW DELHI: Indian diesel consumption is rising, driven by increased truck movement during the festival season and the nation’s efforts to shield motorists from higher global prices, according to industry sources and preliminary sales data.

Global diesel prices have surged to record highs in many markets due to disrupted supply as the prolonged Iran war and the Russia-Ukraine conflict pose inflation and cost-of-living threats to governments and consumers.

Sales of diesel by state-run fuel retailers in the first half of October rose to 3.65 million metric tons (around 27 million barrels), up about 26.4% from the same period in September and 25.4% from a year earlier, data shows.

“Diesel consumption is rising due to demand from the agriculture sector, and transportation has picked up due to festival season demand,” said SP Singh, a senior fellow at the Indian Foundation of Transport Research and Training.

Farmers in India use diesel-fuelled gensets for irrigation.

“Wholesalers have boosted purchases, leading to higher trucking, to build inventory and meet consumer demand during the festival season till at least Diwali in November,” said Singh.

He said truck sales rose sharply to 44,323 units in September 2026, up 33.57% from August.

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Fuel sales at below-market rates

State-run Indian Oil Corp, Bharat Petroleum and Hindustan Petroleum mostly meet local demand and sell fuel at below market rates to retail consumers.

The three companies have not revised pump prices since May and are currently taking a hit of around 20 rupees ($0.21) on retail sale of a litre of diesel, said Prashant Vasisht, senior vice president at rating agency ICRA Ltd.

In contrast, private retailers Nayara Energy and Reliance Industries have raised prices and are exporting fuels to profit from higher global margins.

Diesel is also consumed for generating electricity to meet rising power demand, Vasisht said, adding customers who were buying from private companies are now shifting to state retailers’ outlets.

A liter of gasoline and gasoil sold at private retailers’ fuel stations is costlier by 3 rupees and 5 rupees, respectively, compared with the prices of state fuel retailers.

State retailers’ gasoline sales rose to 1.55 million tons during October 1-15, a growth of 0.9% from the same period last month, the data showed.