India sees record petrol and diesel consumption on vehicle sales, EVs yet to catch up speed

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Indian oil marketing companies (OMCs) seem to be riding high on the growing vehicle ownership in India. A Petroleum Ministry report analysing Petroleum and lubricants (POL) consumption in the 2023-24 fiscal says that OMCs sold 37.22 MMT of petrol during the year, 6.4% higher than FY23.

“This is record consumption with a monthly average of more than 3 MMT. The consumption riding on vehicle ownership growth has almost doubled since a decade back with a CAGR of 8.1%. Clearly, buoyant vehicle sales are giving a huge push to petrol sales,” the report noted.

According to Vahan registrations and Society of Indian Automobile Manufacturers (SIAM) data, total vehicle sales stood at 2.39 crore in FY24, 12.5% higher than the previous fiscal. Of these, passenger vehicles or cars recorded sales of 42.19 lakh, higher by 8.45% YoY, with about 60% of sales being SUVs indicating their dominance in the segment.

Three-wheeler sales registered growth of 41.5% with 6.92 lakh units in FY24 compared to 4.89 lakh in the previous fiscal. Two-wheelers, on the other hand, which have the lion’s share of vehicle sales in India, registered sales of 1.8 crore during the year as against 1.59 crore in previous year, implying a growth of 13.3% YoY.

Meanwhile, 9.68 lakh commercial vehicles were sold in FY24, just 0.6% higher YoY.

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Similarly, diesel consumption during FY24 at 89.65 MMT (1.86 mbpd) grew by 4.4% compafred to 85.9 MMT sales (1.78 mbpd) in FY23. “Consumption riding on economic activities has grown at a CAGR of 2.7% over a decade”, the ministry report said.

EVs yet to catch up speed: Less than a lakh cars sold

The Petroleum Ministry report pointed out that though electric vehicle sales are getting traction, it’s still only 6.85% of total vehicles registered.

In case of passenger vehicles, numbers of EV are less than a lakh and only 1.92% of total registrations in the segment. The biggest share of EV sales comes from three wheelers, accounting for about 38% of total EVs registered in the country.

In the overall three-wheelers segment, electric three wheelers accounted for more than 54% in the last fiscal.

In terms of sales, with 9.47 lakh units sold during the year, electric two wheelers hold the largest share among all EVs. However, it is still only 5.4% of total two wheelers registered and not only even half of the incremental two wheelers registered (21.11 lakh).

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EV buses and minibuses account for only 5.68% of total EV registrations whereas light commercial vehicles (LCV)LCV and medium commercial vehicle (MCV) sales account for an even lower share of 0.74%. In the case of trucks, which are considered hard to switch, the number of electric vehicles is only 0.08%.

Petrol and diesel sales to remain upbeat in FY25

The Petroleum Ministry expects petrol and diesel sales to continue on their upward journey in the current financial year as well.

In FY25, petrol consumption is estimated to cross 39 MMT or 0.94 mbpd (million barrel per day), while diesel consumption is likely to cross 92 MMT or 1.90 mbpd.

India currently consumes 5.1 mbpd of petroleum products including aviation turbine fuel (ATF), liquified petroleum gas (LPG), naphtha, bitumen, petcoke among others, with petrol diesel comprising more than half.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow