India cuts 2026 fuel demand forecast
Analysis based on 8 articles · First reported May 24, 2026 · Last updated May 24, 2026
The cut in India's fuel demand growth forecast for 2026 is expected to negatively impact the oil and gas sector, particularly companies involved in refined products. Reduced air travel and tighter spending patterns will also affect the aviation industry. The weakening of the India — Indian rupee and rising crude import costs will put pressure on India's macroeconomic stability and state-run oil marketing companies.
India's transportation fuel demand growth for the second half of 2026 is projected to slow significantly. This slowdown is attributed to government-led fuel conservation measures, elevated crude oil prices, and a weakening India — Indian rupee. Kpler, a commodities intelligence firm, revised down India's 2026 refined products demand growth forecast by 39%, or 77,000 barrels per day, to 78 kbd from an earlier estimate of 128 kbd. Petrol demand faces the steepest downside risk, with growth projected to undershoot by 25 kbd. Diesel and jet fuel demand growth forecasts were also cut. Prime Minister Narendra Modi urged citizens to conserve fuel, and petrol and diesel prices have been hiked by approximately Rs 5 per litre in three instalments since May 15. The macroeconomic backdrop has deteriorated since the escalation of the US-Iran conflict, leading to higher crude import costs and rupee depreciation. State-run fuel retailers are reportedly losing money as retail prices remain below breakeven levels. Policymakers are prioritizing macroeconomic stability, inflation management, and foreign exchange preservation.
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