India’s oil demand fell 2.8% year-on-year in August 2026, but beyond the headlines, the data gets really interesting. Diesel consumption in August rose 6.8%, and petrol demand grew 8.2% during the month. LPG demand, however, contracted 17.1% amid supply curbs, according to a report by JM Financial. 

India oil demand trend in 2026 

The August decline comes after a brief recovery in July, when oil demand had grown 2.6% year-on-year. Before that, demand had fallen between 4% and 8% every month from April to June, the report said.

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March had started the fiscal year on a positive note, with oil demand up 2.2%. April then slipped 6.5% while May saw the steepest fall this year, down 8.1%. Demand eased slightly in June to a 4.3% decline before July’s rebound, the report noted. 

Diesel and petrol have held up through this volatility. According to the report, diesel demand grew every single month from March to August, with growth ranging between 0.8% and 10%. Petrol followed a similar pattern, growing every month and touching a high of 9.2% in July.

LPG demand falls amid supply curbs 

LPG demand has been the weak link all year. It fell in double digits every month from April onward, hitting a low of 21.2% in May. The report attributed this to ongoing supply curbs. August’s contraction of 17.1% was only a modest improvement from July’s 16.5% decline.

Demand for other industrial products, including naphtha and petroleum coke, also stayed under pressure. This category fell 14.9% in August, following steeper declines through the April to June period, when it fell by more than 24% in some months.

Aviation turbine fuel, or ATF, was the only segment to stay largely flat through the year. It moved within a narrow band, rising 2.1% in August after dipping slightly in June and July, the report noted.

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Oil demand down 3.9% April-August 

For the current financial year, oil demand between April and August is down 3.9% compared to the same period last year, the report said. Within this, diesel demand is up 4.8% and petrol demand is up 7%. LPG demand for the same period has fallen 16.8%.

Cumulative oil demand between March and August this year is down 2.9% from a year earlier. Diesel demand for this stretch is up 5.4% and petrol demand is up 7.1%, while LPG demand has declined 16.1%.