India's Gasoline Demand Could Peak by 2035 as EVs Gain Ground

When gasoline demand “peaks,” it reaches its highest expected level. After that point, total consumption would likely level off or fall rather than keep rising. The forecast is about the direction of demand, not a sudden end to gasoline use.

India’s gasoline demand is facing pressure from several alternatives. IOC chairman A S Sahney said motor spirit is “feeling pressure from all sides.” Higher ethanol blending reduces the amount of pure gasoline needed, while battery-powered and natural-gas vehicles can replace gasoline-powered travel.

Sahney expects gasoline demand to peak by 2035. This does not mean India will stop using gasoline. Other products may grow faster, especially diesel and jet fuel, supported by industrial activity and air travel. For refiners, the changing mix could make flexibility and production of several products increasingly important.

India is changing how vehicles are powered and what fuels they use. Battery vehicles use electricity instead of gasoline, while natural-gas vehicles burn a different fuel. Higher ethanol blending also changes the contents of vehicle fuel and reduces the gasoline component needed for each unit sold.

The article gives a clear example: India launched a new blend containing 85% ethanol in June. It was introduced through the fuel flex mobility program. The government is also encouraging biofuel production and consumption to strengthen energy security. Together, these changes can reduce gasoline’s share of transport energy.

The effect is gradual, not immediate. India’s gasoline demand is likely to peak by 2035, according to IOC chairman A S Sahney. Meanwhile, demand for diesel and jet fuel is expected to keep growing. The transport shift therefore changes the refining mix rather than eliminating liquid-fuel demand altogether.

India has a very large and expanding refining industry. Its refineries turn imported and domestic crude oil into fuels and other products for the Indian market and for export. Capacity matters because it determines how much crude refiners can process and how much refined fuel they can supply.

Oil Minister Hardeep Puri said India’s refining capacity is around 5.36 million barrels per day today. He said it will rise to 5.8 million barrels per day over the next year. These increases reflect years of investment and continued expansion by Indian refiners.

India’s longer-term target is 6.4 million barrels per day by 2032. That growth comes even as gasoline demand may peak by 2035. Refiners expect other products and export opportunities to support the added capacity, including diesel, jet fuel oil, and petcoke. The country is also seeking to keep the region supplied.

Gasoline is mainly associated with one part of transport demand, especially vehicles that use motor spirit. Diesel serves other transport and industrial needs, while jet fuel powers aviation. Their demand can therefore follow different trends instead of moving together.

The article links continued diesel growth to rising industrial activity. It links jet-fuel growth to increased air travel. These sectors can expand even while more drivers use batteries, natural gas, or higher-ethanol blends. A gasoline peak would not automatically mean that factories, freight, or aircraft need less fuel.

India’s refiners are planning around this different product mix. IOC chairman A S Sahney said diesel and jet fuel demand are set for continued growth. India is also expanding refining capacity and exports. That creates an opportunity to process more crude into products with stronger demand, even as gasoline growth weakens.

Refiners process crude into several products at the same time. If gasoline demand grows more slowly, selling every product becomes more important. A gasoline slowdown could reduce one source of revenue, but it would not remove demand for diesel, jet fuel oil, or petcoke.

The article says diesel and jet fuel should keep growing as industry and air travel expand. It also says fuel oil and petcoke represent about 30% of refining yield, and their demand is expected to increase. Refiners can therefore direct attention toward products with stronger demand while continuing to produce gasoline.

India’s refiners are expanding capacity and exports despite the expected gasoline peak. The country’s capacity is around 5.36 million barrels per day and is targeted to reach 6.4 million by 2032. Future success will depend on serving varied product demand and regional markets.

India imports much of the crude oil that its refineries process. Reducing gasoline’s role can therefore improve energy security. Ethanol provides a domestically produced or separately sourced fuel component, while electricity and natural gas offer energy sources that do not require gasoline for each journey.

The article describes India’s 85% ethanol fuel blend, launched in June under the fuel flex mobility program. It also identifies rising use of battery-powered and natural-gas vehicles as pressures on gasoline demand. These mechanisms work differently: ethanol substitutes for part of the blend, while electric and gas vehicles substitute for gasoline-powered vehicles.

India’s Prime Minister’s Office adviser Tarun Kapoor said the country needs to expand biofuel production and consumption. That goal became more urgent as crude prices rose amid the Middle East crisis. India had depended on the Middle East for nearly half its crude imports before the war and has paid more for alternatives since the Iran war began.

Crude oil is a mixture of many hydrocarbon compounds, not a single finished fuel. Refining uses heat, separation, and chemical processing to turn that mixture into products with different uses. Gasoline serves light vehicles, diesel supports transport and industry, and jet fuel powers aircraft.

A refinery does not usually produce only one product from a barrel. It separates lighter and heavier components, then processes them into several marketable outputs. The article lists gasoline, diesel, jet fuel oil, and petcoke among those products. The exact product mix depends on the crude and the refinery’s equipment.

This matters because demand for each product can move differently. India expects gasoline demand to peak by 2035, while diesel and jet-fuel demand continue growing. Fuel oil and petcoke, which represent about 30% of refining yield, are also expected to see increased demand. Refiners must manage the full output mix.