India’s petroleum products consumption grows 10% in FY23


New Delhi: The country’s consumption of petroleum products during FY2022-23 grew 10% compared to the previous fiscal year, reaching a volume of about 223 million tonne, said minister of state for petroleum & natural gas, Rameswar Teli

In a written reply in the Rajya Sabha, Teli said the growth was led by a 13% increase in petrol consumption and a 12% rise in diesel usage.

Robust economic growth, increased industrialization, urbanization, and infrastructure development, along with rising vehicle sales, contributed to the overall higher demand for transportation, energy, and fuel, thereby driving up the consumption of petroleum products.

To boost consumption and support the economy, the central government reduced central excise duty by Rs. 13 per litre on petrol and Rs. 16 per litre on diesel in November 2021 and May 2022, respectively. This reduction was fully passed on to consumers, leading to a fall in retail fuel prices. Many states/UTs followed suit and reduced VAT rates on petrol and diesel.

To reduce the country’s dependence on imported crude oil, the government has adopted a five-pronged strategy, including increasing domestic production of oil and gas, promoting energy efficiency and conservation measures, emphasizing demand substitution, promoting biofuels and other alternate fuels/renewables, and implementing refinery process improvements.

In addition, the government launched the National Biofuel Policy in 2018 to promote the use of alternative clean fuels like ethanol, bio-diesel, and bio-CNG. Ethanol blending in petrol during the Ethanol Supply Year (ESY) 2021-22 (December 2021-November 2022) is estimated to have had an impact of over Rs. 22,600 crore on the import bill of crude oil and petroleum products. 

The National Policy on Biofuels -2018 as amended targets 20% blending of ethanol in petrol by ESY 2025-26. Public sector OMCs have already achieved over 10% ethanol blending in petrol during ESY 2021-22. The sale of E-20 (20% ethanol blended petrol) fuel has also been launched in February 2023.

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Updated: 07 Aug 2023, 05:45 PM IST

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