The gradual waning of conflict intensity in West Asia, coupled with the government removing restrictions on the supply of liquefied petroleum gas (LPG) to commercial consumers, helped boost consumption of the critical cooking medium used by more than 33.50 crore households.
According to the Petroleum Planning & Analysis Cell (PPAC), India’s LPG consumption rose to a six-month high in August 2026, hitting around 2.42 million tonnes (mt) on a provisional basis, up 3.2 per cent M-o-M. However, usage was down by more than 14 per cent annually.
LPG consumption records third consecutive monthly rise
This is the third consecutive month to record an uptick in LPG consumption, as India bulked up on cargoes from the US and more supplies came from the Middle East Gulf (MEG) region as the conflict intensity waned amid off-and-on peace talks between the US and Iran.
India’s LPG consumption declined by 8 per cent Y-o-Y to around 14.74 mt during the first half of the 2026 calendar year as the West Asia conflict and the resultant closure of the Strait of Hormuz (SoH) completely blocked off supply of the key cooking fuel.
Government removes LPG supply restrictions
The conflict led to the government rationing LPG supplies, allocating 100 per cent to the domestic sector and 70 per cent to commercial consumers, a policy that was removed on June 25, 2026. Around 90 per cent of the consumption is by households, with the remaining by commercial & industrial (C&I) consumers.
Petrol consumption rises, diesel usage declines
Petrol consumption surpassed 3.824 mt last month, representing 8 per cent Y-o-Y growth. However, it was almost flat month over month. Usage is rising due to increased sales of personal vehicles. Petrol consumption in August is the second-highest on record, after May 2026 (3.91 mt).
Diesel consumption slipped below the 8 mt mark for the first time since March 2026. In August, India’s diesel usage fell 13.5 per cent M-o-M to roughly 7 mt, but grew 6.5 per cent on an annual basis.
The use of the key transport fuel generally declines during monsoons, as rain affects industrial and mining activity as well as freight mobility. However, some support comes from Kharif sowing activity.