India Fuel Demand Outlook Falls Amid Price Hikes
Analysts have lowered growth forecasts for gasoline and diesel as state retailers raise prices following the conflict in Iran. Rising oil costs and slowing manufacturing activity are reducing freight demand and hitting trucker revenues across major routes.
India state retailers raised gasoline prices 7.8% and diesel 8.6% since mid-May, triggering a slowdown in fuel demand growth. The price hikes reflect a 40% surge in global oil costs following the conflict in Iran. Reduced industrial activity and rising logistics costs now threaten the consumption outlook for the world's third-largest oil importer.
### Fuel Hikes Impact Consumption Forecasts State retailers INDIAN OIL CORP LTD, BHARAT PETROLEUM CORP LTD, and HINDUSTAN PETROLEUM CORP implemented four rounds of increases after holding prices steady during elections. Despite these adjustments, the firms lose a combined 5.5 billion rupees ($57 million, at an exchange rate of 95.7625 rupees per dollar) daily by selling below market rates. Analysts at FGE NexantECA expect further price increases to continue weighing on consumption.
