Due to the strong post-pandemic recovery in energy use in various economic sectors, India's consumption of refined petroleum products and fuels is anticipated to set a new record in the financial year 2023-2024. 

The Ministry of Petroleum and Natural Gas's Petroleum Planning & Analysis Cell (PPAC) projects that annual consumption of petroleum products—which serves as a proxy for oil demand—will likely increase by 4.9% to 233.81 million tonnes. 

This is lower than the revised estimate of 222.95 million tonnes for the current fiscal year.

The previous consumption record for petroleum products was 214.13 million tonnes in 2019-20, according to historical data analysis. The pandemic caused a drop in demand in 2020 and 21 before a modest recovery in demand in 2021 and 22. 

In the current fiscal year, demand for the majority of goods exceeded pre-pandemic highs and is expected to rise further in the following one.

According to the data, consumption of all major fuels—diesel, gasoline, and liquefied petroleum gas (LPG)—will probably reach an all-time high in the following fiscal year. 

The country's most widely used fuel, diesel, is expected to be consumed at 90.56 million tonnes, up 4.3% from the revised estimate for the current fiscal year. 

Petrol consumption is estimated to have increased by 7.7% to 37.80 million tonnes. The robustness of the transportation and industrial sectors can be seen in the higher demand for these two fuels. LPG consumption is expected to rise by 1.7% annually to 29.12 million tonnes

It is also anticipated that consumption of aviation turbine fuel (ATF), which had previously lagged other fuels in terms of recovery, will surpass the previous consumption record of 8.30 million tonnes in 2018-19.

The revised estimate for the current fiscal year anticipates an increase in ATF consumption of 16.4% to 8.61 million tonnes. As travel restrictions affected air traffic, ATF demand had significantly decreased as a result of the pandemic. International air traffic took significantly longer to recover than domestic air traffic did.

As driving has become more commonplace in India, mobility has continued to improve. This year, there has been an increase in oil demand as states have eased COVID-19 restrictions in line with a decrease in new infections

"Gasoline (petrol) and diesel are likely to be particularly favoured by the expected rise in GDP and the already recovering mobility and consequently driving activity," it stated. “India's oil demand is likely to jump 8% to 5.15 million barrels per day in 2022.”

In a similar vein, in accordance with a prediction of a robust economy in 2022, the industrial sector will support the requirements for diesel, LPG, and naphtha.

According to the report, "travel challenges, particularly business-related," are anticipated to slow demand growth for jet kerosene in 2022. Despite this, India's annual growth rate is anticipated to be 0.4 million barrels per day in 2022."

The government's estimates of fuel demand growth are consistent with the projections made by OPEC. The Petroleum Planning and Analysis Cell (PPAC) of the oil ministry predicts that India's fuel demand will likely increase by 5.5% in the fiscal year that begins on April 1.

From the 203.2 million tonnes that were anticipated to be sold in the fiscal year that began in March 2022, it is anticipated that fuel consumption will rise to 214.5 million tonnes (4.3 million bpd) in the years 2022-23

The PPAC forecast is for fuel, whereas the OPEC projections are for crude oil demand. Refineries turn crude oil into fuels like gasoline and diesel, but not all of the produced petroleum products are used in the country. Additionally, a significant amount of petroleum products are exported, causing estimates of crude oil and fuel demand to diverge.

India's ever-increasing oil demand is likely to reach a new record in the near future. This could be attributed to various factors such as rising population, improved economic development and increased consumption of petroleum products by India. Furthermore, government policies such as subsidies on petrol and diesel have also played a key role in escalating the country's oil requirements.