India Embraces Clean Energy: February 2025 Sees Notable Dip in Fuel Consumption

India's fuel consumption in February 2025 decreased due to a shift toward electric vehicles and CNG. The demand for petrol and diesel saw significant declines, reflecting a transition in energy usage. This trend highlights the growing popularity of alternative fuels driven by government policies and rising fuel prices.

India experienced a significant decline in fuel consumption in February 2025, primarily driven by a growing shift towards alternative fuel sources like electric vehicles (EVs) and compressed natural gas (CNG), according to a detailed report from SBI Securities. Petrol consumption fell to 3.1 million metric tonnes (MMT), marking a 12-month low with a 5.4 per cent month-on-month (MoM) decrease. Despite this, petrol usage remained 3.5 per cent higher than in February 2024.

This decline represents the lowest petrol consumption for the current financial year, with May 2024 witnessing the peak at 3.4 MMT. SBI Securities noted that diesel demand has also been impacted by the fuel mix shift towards alternative fuels, particularly impacting the light commercial vehicle segment.

Diesel consumption, critical to transportation and industrial sectors, fell to 7.3 MMT in February 2025, a 5.1 per cent MoM drop and a 1.2 per cent decrease year-on-year (YoY). The lowest diesel consumption since September was reported by the Petroleum Planning & Analysis Cell, which highlights decreasing high-speed diesel consumption amid growing adoption of CNG and EVs.

The adoption of aviation turbine fuel (ATF) also saw a decline, marking a six-month low at 7.3 MMT, as reported by the Petroleum Planning & Analysis Cell.

This shift signals a gradual transition in India's energy sector, with alternative energy sources gaining momentum. Government initiatives promoting EV adoption, expanding CNG infrastructure, and rising fuel costs are encouraging consumers and businesses to consider sustainable options.

The changing dynamics in fuel usage have implications for government revenue, particularly in fuel taxes, as the oil sector adapts to these evolving trends in the energy landscape.

(With inputs from agencies.)