Energy investors are sifting through a complex set of data points for April 2025, revealing a nuanced picture of petroleum product consumption. While the headline figure indicates a marginal year-on-year dip in overall demand, core fuels like diesel, petrol, and LPG demonstrated robust growth, signaling underlying economic activity. However, a significant slump in naphtha consumption casts a shadow, pointing to specific industrial sector headwinds that warrant close attention.
According to the latest figures from the Petroleum Planning and Analysis Cell (PPAC), total petroleum product consumption reached 20.13 million metric tonnes (MMT) in April 2025. This represents a fractional decline of 0.2 percent compared to the 20.16 MMT recorded in the corresponding month last year. This slight contraction masks a divergence in performance across different fuel categories, offering both bullish and cautious signals for the oil and gas investment landscape.
Core Fuels Powering Demand Growth
Despite the marginal overall decline, key transportation and household fuels exhibited strong upward momentum, underscoring resilient consumer demand and mobility. Investors should note these segments as potential drivers for future revenue growth in refining and distribution companies.
Diesel, the bedrock of the nation’s logistics and agricultural sectors, saw a commendable increase. Consumption climbed by 4.4 percent, reaching 8.28 MMT in April 2025, up from 7.93 MMT in April of the previous year. As the largest component of petroleum product consumption, this expansion in diesel usage is a vital indicator of persistent commercial and industrial activity. Similarly, petrol (gasoline) consumption surged by 5 percent to 3.45 MMT from 3.29 MMT year-on-year, reflecting robust personal vehicle usage and potentially increased leisure travel.
LPG (liquefied petroleum gas) demand also posted a significant gain, rising by 6.2 percent to 2.52 MMT during the month, compared to 2.37 MMT in April 2024. This growth is strongly supported by government initiatives, particularly the Pradhan Mantri Ujjwala Yojana (PMUY), which continues to expand access to clean cooking fuel. PMUY beneficiaries accounted for a substantial 85.5 percent of the domestic LPG demand in April. As of April 30, 2025, the program enrolled 10.33 crore beneficiaries out of 32.99 crore active domestic connections, highlighting its profound impact on household energy consumption.
The aviation sector also continued its recovery trajectory, with Aviation Turbine Fuel (ATF) consumption increasing by 3.9 percent. Demand reached 0.77 MMT, up from 0.74 MMT in April 2024, signaling healthier air travel volumes and potentially stronger airline financials. Furthermore, Light Diesel Oil (LDO) consumption recorded an impressive 67.8 percent increase to 0.086 MMT, primarily driven by heightened demand from the power generation sector, indicating rising industrial power requirements.
Naphtha’s Steep Decline and Industrial Softness
While several key fuels demonstrated strength, the performance of industrial feedstocks and heavy fuels presents a more cautious outlook. The most striking development was the sharp contraction in naphtha consumption, a critical input for the petrochemical industry.
Naphtha usage plummeted by 23.4 percent, dropping to 0.93 MMT in April 2025 from 1.22 MMT in the same month last year. This substantial decline is predominantly attributed to lower off-take by petrochemical plants. This trend suggests a slowdown in the manufacturing of plastics, chemicals, and other derivatives, which could impact the profitability of companies reliant on these inputs or involved in their production. Investors in the petrochemical segment should monitor this closely for signs of recovery.
Further evidence of industrial moderation emerged from other heavy fuel categories. Bitumen consumption, often linked to infrastructure development and road construction, declined by 4.7 percent to 0.80 MMT. Furnace oil and low sulphur heavy stock (LSHS) usage also fell by 8.8 percent to 0.48 MMT, reflecting reduced industrial heating and power generation demand from specific sectors. Petcoke consumption, commonly used in cement and power industries, saw a 3.7 percent decrease to 1.74 MMT from 1.81 MMT in April 2024. Kerosene consumption also registered a 3.7 percent year-on-year decline, settling at 0.03 MMT.
Natural Gas Market Sustains Growth
Beyond petroleum products, the natural gas market continued its expansion, reflecting an ongoing shift towards cleaner energy sources and industrial demand. Natural gas consumption in April 2025 rose by 9.1 percent year-on-year, reaching 5,901 million standard cubic meters (MMSCM).
Sectoral consumption data provides valuable insights for investors in gas infrastructure and distribution. The fertilizer sector remained the largest consumer, accounting for 29 percent of total gas demand, vital for agricultural output. City gas distribution (CGD) followed at 21 percent, indicating robust growth in domestic and vehicular gas usage. The power sector utilized 12.5 percent, and refineries consumed 8 percent, showcasing the diverse industrial applications driving natural gas demand.
Broader Economic Indicators and Investor Takeaways
Complementary economic data for April 2025 offers a mixed but generally positive backdrop. Cargo throughput at major ports increased by 7.02 percent, suggesting healthy trade volumes and logistical activity. Electricity consumption grew by 2.2 percent, reaching 139.99 billion units, broadly aligning with industrial and residential power needs. Highway toll collection, a proxy for road transportation activity, registered ₹5,371 crore for the month, reinforcing the strength seen in petrol and diesel demand.
For oil and gas investors, April’s data presents a nuanced picture. The robust growth in key consumer and transportation fuels like petrol, diesel, and LPG, alongside expanding natural gas consumption, points to underlying economic resilience and strong household demand. This bodes well for companies with significant exposure to these segments, including refining, marketing, and city gas distribution entities. However, the sharp decline in naphtha and other industrial fuels signals specific challenges within the petrochemical and heavy industry sectors. Investors should scrutinize company earnings and forward guidance for signs of these sectoral pressures impacting profitability. Monitoring global crude oil prices in conjunction with these domestic demand trends will be crucial for navigating the evolving energy market landscape.
