India's oil demand set to rise by 4% in Q4 amid festival and agricultural season

The increase comes after a period of subdued consumption due to excessive monsoon rains, which affected fuel usage in key sectors such as transportation and construction.

Himi Srivastava, South Asia Oil Analyst at S&P Global Commodity Insights, projected an annual demand increase of 50,000-55,000 barrels per day (b/d) for both gasoline and diesel in Q4 2024. However, the ongoing northeast monsoon rains could temper demand in some regions.

India, which imports 85 Percent of its crude oil, saw a dip in oil consumption in September due to 8 Percent higher-than-average rainfall during the June-September monsoon. Diesel demand fell nearly 2 Percent year over year as road movement, construction, and mining activities were impacted. However, gasoline demand grew by 3 Percent compared to the same period last year, despite a slight decrease from the previous month.

Looking ahead, the start of the election season in major states like Maharashtra and Jharkhand, coupled with the marriage season from November to January, is expected to boost transportation fuel demand. Srivastava noted that increased automobile sales and the movement of goods during this period will further drive fuel consumption.