LPG Demand in the Country Drops by 12%, While Demand for Petrol and Diesel Rise

A decline in LPG cylinder consumption was recorded in the month of October, while an increase was observed in the demand for petrol and diesel. Let’s explore why LPG consumption has fallen.

LPG cylinders are used for cooking in most households. However, there has been a recent rise in the prices of both LPG cylinders and petroleum products (petrol and diesel). A primary reason for this is the disruption in supply caused by the ongoing tensions in the Middle East. Against this backdrop, it is notable that there has been a significant drop in LPG consumption over the last month—October.

The key point is that while LPG cylinder consumption has declined, the demand for petrol and diesel has increased. This raises the question: why has LPG consumption fallen, and what are the underlying reasons?

Increase in Petrol Demand

According to the latest data from the Petroleum Planning and Analysis Cell (PPAC), let’s first look at the rise in petrol demand. In the month of October, petrol consumption increased compared to the previous year, rising by 3.11% to reach 3.77 million tonnes.

Increase in Diesel Demand

It is also significant that the rise in demand is not limited to petrol; the demand for diesel has also increased. Diesel demand has grown by 11.69% compared to the previous year, reaching 8.15 million tonnes.

How Much Did LPG Consumption Decline?

In October 2024, the country witnessed a decline in LPG consumption. According to the data, LPG consumption fell by 12.11% on an annual basis, dropping to 2.64 million tonnes. In this context, it is crucial to understand the reasons behind the decline in LPG consumption.

Reasons for the decline in LPG consumption

The decline in LPG consumption is linked to the ongoing tensions in the Middle East, which have impacted LPG supplies. Significantly, India imports a large portion of its LPG requirements from other countries; the supply disruptions caused by these tensions have led to multiple price hikes for LPG cylinders within the country. This raises a question: if there has been a decline in LPG consumption, what is driving the increased demand for petrol and diesel?

Why has the demand for petrol and diesel risen?

The rise in demand for petrol and diesel can be attributed to an increase in road transport and commercial activities across the country, which has sustained a high level of vehicle usage. This is the reason for the observed growth in the demand for petrol and diesel.

Are people shifting from LPG to PNG?

Following the supply challenges caused by the tensions in the Middle East, the government has begun promoting the use of Piped Natural Gas (PNG) as an alternative to LPG cylinders. Consequently, in areas where PNG connections are available, people are being encouraged to switch from LPG to PNG.