India’s petrol demand could reach its peak by 2035 as electric vehicles (EVs), ethanol blending and gas-powered cars reshape the country’s transport fuel market, according to A. S. Sahney, chairman of state-run Indian Oil Corporation (IndianOil). Speaking at an industry event on October 28, 2026, Sahney said petrol was facing pressure from several directions as consumers and businesses gradually adopt alternative energy sources.
The outlook does not mean India’s overall oil consumption will necessarily peak at the same time. Sahney expects demand for diesel and aviation turbine fuel to continue growing, supported by industrial expansion and the aviation sector. He also indicated that demand for heavier petroleum products, including fuel oil and petroleum coke, could rise. The forecast highlights a changing energy mix for India and raises important questions about how refiners will adapt their investments to shifting demand. Source: Reuters via Moneycontrol
Key Takeaways
- Petrol demand outlook: IndianOil chairman A. S. Sahney expects India’s petrol demand to peak by 2035.
- EV adoption: Electric vehicles could reduce demand for petrol-powered cars as charging infrastructure and vehicle availability improve.
- Ethanol blending: Greater use of ethanol in transport fuel could reduce reliance on conventional petrol.
- Different fuel trends: Diesel and aviation fuel demand are expected to continue rising, according to Sahney.
- Refinery implications: Oil companies may need to adjust production, investment and product portfolios as demand shifts.
- No immediate decline implied: A projected peak in 2035 does not mean petrol consumption will fall immediately or that total oil demand will peak in the same year.
Why India’s Petrol Demand Could Peak by 2035
India has been one of the important growth markets for petroleum products, supported by rising mobility, urbanization, economic expansion and increasing vehicle ownership. Petrol demand has benefited from the growing number of cars and two-wheelers on Indian roads.
However, the factors supporting consumption are changing. Electric vehicles do not require petrol, ethanol can replace a portion of conventional gasoline in blended fuel, and vehicles powered by compressed natural gas (CNG) or other gas-based fuels can reduce dependence on petrol.
Sahney’s forecast reflects the combined effect of these developments. He described petrol, also known as motor spirit, as facing pressure from multiple directions.
The 2035 date should be understood as an industry outlook rather than a guaranteed turning point. Actual consumption will depend on EV adoption, fuel prices, government policy, consumer preferences, vehicle efficiency and India’s broader economic growth.
A peak also refers to the point at which demand reaches its highest level before stabilizing or potentially declining. It does not automatically mean a sharp drop in consumption immediately afterward.
How Electric Vehicles Could Change Petrol Consumption
Electric vehicles are one of the main factors behind the expected shift in petrol demand. Battery-powered cars and two-wheelers use electricity rather than petrol for propulsion, reducing direct demand for conventional transport fuels.
The effect depends on how quickly EVs become affordable and practical for Indian consumers. Purchase prices, battery costs, charging access, range, financing and the availability of suitable models all influence adoption.
Two-wheelers are particularly relevant to India’s transport market because they are widely used for personal mobility and commuting. Electric two-wheelers can replace petrol consumption without requiring changes to the country’s entire passenger-car fleet.
Commercial vehicles present a more varied picture. Electric buses and smaller delivery vehicles can replace some liquid-fuel consumption, but long-distance freight and other demanding applications face different requirements. Diesel therefore may follow a different demand trajectory from petrol.
The transition is unlikely to happen uniformly across India. Adoption rates can vary by state, city, income level and vehicle category, meaning petrol will remain important even as the share of electric mobility increases.
Ethanol Blending Could Reduce Reliance on Conventional Petrol
Ethanol blending is another part of the changing fuel landscape. Ethanol is an alcohol-based fuel commonly produced from agricultural feedstocks such as sugarcane and certain grains. When blended with petrol, it can replace a portion of the gasoline component used by compatible vehicles.
India has expanded its ethanol-blending program as part of efforts to diversify transport energy sources, support domestic agricultural supply chains and reduce dependence on imported crude oil.
Higher blending levels can change the amount of conventional petroleum gasoline required to meet transport-fuel needs. However, the overall impact depends on blending percentages, fuel consumption, vehicle compatibility and the volume of petrol sold.
Ethanol is not a complete substitute for electrification. It is one of several measures that can influence demand for conventional petrol, alongside improvements in vehicle efficiency and the adoption of alternative fuels.
For oil companies, the policy creates both opportunities and operational considerations. Refineries and fuel-distribution networks must adapt to changing fuel specifications, supply arrangements and demand patterns.
Why Diesel and Aviation Fuel May Continue Growing
A key point in Sahney’s outlook is that petrol may follow a different path from other petroleum products.
| Fuel or product | Outlook reported by IndianOil’s chairman | Main factor cited |
|---|---|---|
| Petrol | Demand could peak by 2035 | EVs, ethanol blending and gas-powered cars |
| Diesel | Consumption expected to keep growing | Industrial expansion |
| Aviation turbine fuel | Consumption expected to keep growing | Growth in aviation |
| Fuel oil and petroleum coke | Demand expected to rise | Demand for heavier petroleum products |
Source: Reuters reporting published by Moneycontrol on October 28, 2026.
Diesel plays an important role in freight transport, construction, agriculture and industrial activity. Electrification can gradually reduce its use in certain applications, but replacing diesel across heavy-duty transport and industrial operations can be more complex than switching smaller passenger vehicles to electricity.
Aviation fuel faces a different set of constraints. Air travel demand can rise with household incomes, tourism, business activity and airport capacity. Large-scale replacement of conventional jet fuel requires technologies and supply chains that are still developing.
The divergence matters because a decline in petrol demand alone would not necessarily translate into an equivalent decline in demand for crude oil or refined products overall.
What the Forecast Means for India’s Oil Refiners
Indian refiners have to plan investments years in advance. Refineries are capital-intensive facilities designed to process crude oil into a range of products, including petrol, diesel, aviation fuel, liquefied petroleum gas and petrochemical feedstocks.
If petrol demand eventually plateaus, refiners may need to reconsider the mix of products they produce and the configuration of their facilities. The implications will depend on whether demand for other products can offset slower growth in petrol consumption.
Sahney said heavier products such as fuel oil and petroleum coke—which together account for about 30% of refining yield in the context he described—could also see demand growth. This suggests that refiners will need to assess product-specific demand rather than assume all petroleum markets will move in the same direction.
Potential responses include improving refinery flexibility, increasing petrochemical integration and expanding into alternative energy businesses. The commercial case for each investment will depend on demand, technology, margins, regulation and capital costs.
A projected petrol-demand peak in 2035 does not make existing refineries obsolete. It does, however, reinforce the importance of long-term planning and the ability to respond to changes in the composition of fuel demand.
IndianOil Is Also Evaluating New Energy Technologies
Sahney also said IndianOil was evaluating different technologies, including small modular nuclear reactors. He indicated that any final decision would depend on commercial viability.
Small modular reactors are nuclear power systems designed around comparatively compact reactor units. They are being explored in several countries as a potential source of low-carbon electricity, although costs, regulatory approvals, construction timelines and project economics remain important considerations.
The mention of these reactors is separate from the petrol-demand forecast. It illustrates the range of energy technologies being considered by major energy companies as they assess future supply requirements and opportunities beyond conventional fuels.
Any investment decision would require a detailed assessment of the technology, regulatory framework, financing and potential demand for the electricity produced.
The Bigger Picture
India’s potential petrol-demand peak reflects a gradual change in how the country may power its transport system. EVs, ethanol blending and gas-powered vehicles can reduce reliance on conventional petrol, but they will not transform every segment of transport at the same pace. Growth in freight, industry and aviation can sustain demand for other petroleum products even as passenger mobility becomes more electrified.
For IndianOil and other refiners, the challenge is to prepare for several trends at once: rising energy consumption, changing fuel preferences and uncertainty about the timing of the transition. The companies that plan effectively will need to evaluate each product market independently rather than treating all oil demand as a single, uniform trend.
FAQs
1. When is India’s petrol demand expected to peak?
IndianOil chairman A. S. Sahney said India’s petrol demand could peak by 2035, with EV adoption, ethanol blending and gas-powered cars contributing to the change.
2. Will India’s total oil demand also peak by 2035?
Not necessarily. The forecast concerns petrol demand specifically. Sahney expects diesel and aviation fuel consumption to continue growing, so the outlook for total oil demand may differ.
3. How will electric vehicles affect petrol demand?
EVs use electricity instead of petrol for propulsion. As more petrol-powered cars and two-wheelers are replaced by electric models, demand for conventional petrol may grow more slowly.
4. Why is ethanol blending important?
Ethanol can replace a portion of conventional gasoline in blended transport fuel. Higher blending levels can reduce the amount of petroleum gasoline needed, although the overall impact depends on fuel consumption and blending rates.
5. What could the forecast mean for IndianOil?
A potential peak in petrol demand could influence refinery planning, investment decisions and product strategies. IndianOil will also need to consider demand for diesel, aviation fuel, petrochemicals and other energy products.
Looking Ahead
The next decade will help determine whether India’s petrol demand reaches a plateau around the mid-2030s. EV affordability, charging infrastructure, ethanol supply, fuel prices and economic growth will all influence the outcome. The forecast should be treated as an industry assessment rather than a certainty, and it will need to be tested against actual consumption data as the market evolves.
For IndianOil, the larger strategic question is how to serve a growing economy while adapting to changing fuel demand. Petrol may face a structural slowdown even as other energy products continue to expand. Refinery flexibility, careful capital allocation and investment decisions based on commercial viability will be important as India’s energy mix changes.
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