India’s LPG usage rose 8% in July to 2.37 million tonnes as commercial supply restrictions were lifted. While consumption is at a six-month peak, it remains 16% lower than last year. Investors tracking energy stocks may note that the easing of Middle East tensions has stabilized supply chains, though monsoon-related dips in diesel and aviation fuel demand persist.
India’s liquefied petroleum gas (LPG) consumption saw a notable recovery in July 2026, climbing 8% month-on-month to reach 2.37 million tonnes. This figure represents the highest consumption level recorded in the last six months, signaling a return to more normal supply conditions for commercial and industrial users.
Impact of Supply Normalization
The recovery follows the government's decision on June 25, 2026, to remove supply restrictions that had been in place earlier this year. During the period of supply constraints caused by regional tensions in the Middle East, commercial users had been limited to 70% of their typical LPG supply, while residential consumers were prioritized at 100%. The removal of these limits, combined with improved cargo flows from the Middle East and increased imports from the United States, has supported this recent uptick in usage.
Despite the positive month-on-month growth, the annual picture shows that total consumption remains about 16% lower than in the same period last year. The first half of 2026 was marked by significant supply chain disruptions, particularly due to conflicts in West Asia and challenges related to the Strait of Hormuz, which pressured total availability.
Trends in Transport Fuels
While LPG demand showed signs of improvement, other key petroleum products experienced a seasonal slowdown in July. Diesel consumption, a critical indicator of industrial and logistics activity, fell 6.5% month-on-month to approximately 8.05 million tonnes. Market analysts often observe this decline during the monsoon months, as heavy rains typically reduce construction activity and transportation movement. Nevertheless, diesel consumption remains resilient on a year-on-year basis, showing growth of over 9% compared to July 2025 and staying above the five-year average for the month.
Petrol consumption remained relatively stable at 3.8 million tonnes, marking a modest annual increase of nearly 9%. In contrast, aviation turbine fuel (ATF) demand faced downward pressure, dipping 4% month-on-month and 1.5% year-on-year to 699,000 tonnes. This level of ATF consumption is the lowest observed since December 2023.
Investors looking at the energy sector may continue to track these consumption patterns as indicators of broader economic activity. The next monitorable event will be the August and September data, which will reveal whether the momentum in LPG demand persists or if the monsoon season continues to dampen transport fuel requirements across the country.