India’s energy sector paints a complex picture for investors, with recent data revealing a significant 18.4% surge in petroleum product (POL) imports for June 2025. This increase occurs even as the nation’s overall oil and gas import expenditure witnessed a notable decline, dropping to $10 billion from $10.8 billion in the corresponding month of the previous year. This intriguing dynamic suggests a strategic recalibration in India’s energy procurement and consumption patterns, driven by both domestic demand and global price fluctuations.
Petroleum Product Imports See Robust Growth
The rise in petroleum product imports in June 2025 marks a substantial increase, reflecting evolving domestic requirements. Over the broader April-June quarter of FY26, POL product imports expanded by 2.9% compared to the same period in FY25. This quarterly growth primarily stems from heightened demand for specific products, including liquefied petroleum gas (LPG), naphtha, and petcoke. The uptick in LPG imports, in particular, highlights growing household consumption and industrial applications, while increased naphtha and petcoke imports could signal robust activity within the petrochemical and industrial sectors, respectively.
Declining Overall Import Bill Amidst Price Shifts
Despite the significant jump in refined product imports, India successfully reduced its total oil and gas import bill for June 2025. This cost efficiency largely stems from more favorable crude oil prices on the international market. Crude oil imports alone constituted the lion’s share of the June 2025 bill, reaching $9.7 billion out of the total $10 billion. Meanwhile, liquefied natural gas (LNG) imports contributed $1.3 billion to the overall energy import expenditure for the month. It is important for investors to note that while crude volumes increased by 5% in June 2025, the April-June quarter actually saw a slight dip of 0.3% in crude oil imports year-on-year, indicating a nuanced approach to feedstock procurement.
Global Crude Price Dynamics Influence Costs
The average price for the Indian basket crude stood at $69.77 per barrel in June 2025, marking an increase from $64.04 in May 2025. However, this figure represents a considerable reduction when compared to the $82.55 recorded in June 2024, directly contributing to the lower overall import bill. Similarly, Brent crude averaged $71.46 per barrel in June 2025, up from $64.22 per barrel in May, but significantly below the $82.61 per barrel observed in June of the prior year. These price movements underscore the critical role global commodity markets play in shaping India’s energy economics and its capacity to manage its import costs effectively.
Domestic Refining and Production Landscape
India’s refining sector processed 22.1 million metric tonnes (MMT) of crude oil in June 2025, a marginal 0.3% decrease compared to June 2024. Public sector and joint venture refiners collectively processed 14.8 MMT, while private sector facilities handled 7.3 MMT. Of the total crude processed, indigenous sources contributed 2.2 MMT, with the overwhelming majority, 19.9 MMT, coming from imported crude. This highlights India’s continued reliance on international markets for its refining feedstock.
On the upstream front, indigenous crude oil and condensate production reached 2.3 MMT in June 2025, registering a modest year-on-year decline of 0.5%. Major state-owned enterprises continue to dominate domestic output, with ONGC producing 1.5 MMT and Oil India Ltd contributing 0.3 MMT. Production under Production Sharing Contracts (PSC) and Revenue Sharing Contracts (RSC) accounted for 0.6 MMT. This slight contraction in domestic production emphasizes the strategic importance of enhancing exploration and production efforts to mitigate import dependence.
Petroleum Product Output and Export Trends
Domestic production of petroleum products demonstrated robust growth, reaching 23.5 MMT in June 2025, a 3.3% increase over June 2024. Refinery output formed the bulk of this production at 23.2 MMT, complemented by 0.3 MMT from fractionators. High-speed diesel (HSD) maintained its position as the dominant product, accounting for 42.6% of the total. Motor spirit (MS) followed at 16.9%, with naphtha at 6.7%, aviation turbine fuel (ATF) at 5.8%, petcoke at 5.2%, and LPG at 4.4%. These proportions reflect the country’s primary energy consumption patterns and industrial demands.
Conversely, India’s exports of petroleum products experienced a downturn, falling by 2.8% in June 2025. The April-June quarter also saw a 3.2% decline in POL product exports compared to the previous year. This reduction is largely attributable to lower international sales of HSD and ATF, potentially signaling increased domestic consumption or a shift in global demand for these refined products.
Surging Domestic Consumption Across Key Fuels
India’s appetite for petroleum products continues to grow, with consumption for the April-June FY26 quarter totaling 61.8 MMT, a 1.1% increase from 61.2 MMT in the same period last year. This growth was spearheaded by strong demand for LPG, which saw an 8.9% rise, followed by motor spirit (7.1%), aviation turbine fuel (3.9%), and high-speed diesel (2.6%). Kerosene (SKO), petcoke, and light diesel oil (LDO) also recorded increased usage. For June 2025 alone, petroleum product consumption reached 20.3 MMT, marking a 1.9% increase over June 2024.
Natural gas consumption also experienced a substantial uplift, with total usage for June 2025 hitting 5,860 million standard cubic meters (MMSCM), representing a remarkable 10% year-on-year increase. This robust growth in both petroleum products and natural gas consumption underscores India’s expanding energy needs, driven by industrial activity, transportation, and household demand. Investors should monitor these consumption trends closely as they provide key insights into India’s economic health and future energy infrastructure requirements.
