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The diesel market in India is losing momentum as the pace of demand growth eases, casting a pall over the world’s third-largest oil importer as the economy expands at a slower pace and consumption patterns shift.
Sales of the fuel used to power trucks and farm machinery were flat at 7.64 million tonnes in October from a year earlier, according to preliminary oil ministry data. In the first 10 months of 2024, volumes expanded by just 1.8 per cent, the slowest pace since 2020, when pandemic lockdowns hit demand.
Diesel accounts for about four barrels in every 10 of oil used in India, and the softness comes just as signs of weak buying have been seen in China and Europe.
That’s potentially a headwind for crude prices, with investors also grappling with market cross-currents thrown up by OPEC+ supply policy, the US presidential election, and prospects for a global oil glut in 2025.
The listless demand for diesel last month contrasts with patterns seen in other key petroleum products.
Gasoline sales jumped 8.4 per cent in October on-year to 3.4 million tonnes, while jet-fuel volumes swelled by 8.6 per cent to 751,000 tonnes.