India’s jet fuel and natural gas consumption are expected to grow at almost 10 per cent annually in FY26—the highest among all refined petroleum products—reflecting the rising spending power in the world’s fastest-growing emerging economy.

According to the Petroleum Planning and Analysis Cell (PPAC) projections, India’s aviation turbine fuel (ATF) consumption is likely to grow by 9.82 per cent in FY26 to 9.95 million tonnes (mt) against a revised estimate of 9.06 mt in FY25.

Similarly, natural gas usage is projected to rise by 10 per cent Y-o-Y to 61.37 mt compared to the revised estimate of 55.79 mt expected in FY25.

Flying high

Analysts and industry players attribute the growth to a performing economy coupled with steady manufacturing and agricultural activity. Besides, lower prices (compared to 2023) and focus on cleaner fuels is also contributing to the uptick in gas demand.

OPEC in its monthly oil market report for January 2025 said that India’s GDP in the current calendar year is expected to remain strong, albeit slightly below 2024 growth rates. Furthermore, steady manufacturing and agricultural activity are projected to continue amid healthy mobility levels.

“Indian government is reportedly planning to invest $11 billion in airport infrastructure. This is expected to be used for construction of new airports and expansion of existing ones to reach 200 operational airports by 2025. At present, India has 157 airports. This new development is expected to support jet/kerosene growth by more than 20,000 b/d, Y-o-Y, in 2025,” OPEC projected.

Jet fuel usage hit an all-time high of 778,000 tonnes in December 2024, as the year-end holiday season boosted both international and domestic travel.

Similarly, the demand for natural gas is rising in the world’s fourth-largest liquified natural gas (LNG) importer due to an expanding industrial and manufacturing base.

The International Energy Agency (IEA) expects India’s gas demand to grow by around 8 per cent year over year in 2025, up from an annual growth of almost 9 per cent in 2024.

Gasoline shines

Among auto fuels, the consumption of petrol is expected to grow at a healthy rate of 6.65 per cent Y-o-Y in FY26 to 42.64 mt, from a revised estimate of 39.98 mt in FY25.

On the other hand, the consumption of diesel, which accounts for more than 40 per cent of India’s total refined products usage, is projected to grow at 2.77 per cent Y-o-Y to 94.12 mt in FY26 from a revised estimate of 91.58 mt in FY25.

According to OPEC, steady manufacturing and farm activity along with growing mobility is expected to bolster the demand for gasoline and diesel to grow by 50,000 barrels per day (b/d), Y-o-Y, and 45,000 b/d, Y-o-Y in 2025, respectively.

India’s cumulative refined petroleum product consumption is likely to grow by 4.65 per cent Y-o-Y to 252.93 mt in the next financial year from 241.68 mt in FY25.