TL;DR Panic buying in Hyderabad and various other parts of the country, triggered by rumours and a shift to upfront payments for petrol dealers, led to temporary shortages at fuel pumps. India relies heavily on imported crude oil to produce petrol, making it vulnerable to global disruptions, especially through routes like the Strait of Hormuz. With reserves covering about 9.5 days and total storage of 74 days, there is no nationwide shortage, only a temporary supply and payment bottleneck.

Context

On 23 March 2025, long queues formed outside petrol bunks across Hyderabad. “No Stock” boards went up at several outlets. Rumours of a nationwide fuel shortage spread rapidly, and within 24 hours, fuel sales in the city had nearly doubled. But was this a genuine supply crisis or something else entirely?

The backdrop matters. Geopolitical tensions in West Asia, specifically involving Iran, Israel, and the United States, have raised concerns about disruptions to the Strait of Hormuz, the narrow waterway through which a large share of the world’s crude oil passes. Indian refineries, which depend heavily on crude imports from the Gulf region, were reportedly facing mounting cost pressures.

Against this backdrop, India’s major OMCs switched petrol pump dealers from a short-term credit system to an upfront, cash-and-carry model. Dealers who could not immediately arrange the advance payments simply could not lift fuel from the depot. Empty pumps appeared, not because the country had run out of petrol, but because the payment chain broke down temporarily.

Before asking whether India faces a structural fuel shortage, it helps to look at what the actual production and consumption data say.

Who Compiles This Data?
The data comes from the Petroleum Planning and Analysis Cell (PPAC), which operates under the Ministry of Petroleum and Natural Gas, Government of India. PPAC tracks production, consumption, imports, and exports of petroleum products, including motor spirit, commonly known as petrol, across India on a monthly and yearly basis.

Where can I download Clean & Structured Data on Petrol?

Clean, structured, and ready-to-use datasets related to petrol production, imports, exports, and state-wise per capita consumption can be downloaded from Dataful.

Key Insights

India’s petrol production has grown 35% in five years, and the fuel itself has gotten cleaner

India’s total petrol production grew from about 35.8 million tonnes in 2020–21 to about 48.3 million tonnes in 2024–25, a growth of roughly 35% in five years. The figure for 2025–26 (up to February) already stands at about 45.5 million tonnes.

Production recovered after the pandemic dip and has grown at roughly 6 to 7% annually. India now primarily produces BS-VI grade petrol, which has significantly lower sulphur content. One anomaly is the steady rise in “MS Others,” from about 11 million tonnes in 2020–21 to about 18.3 million tonnes in 2024–25. This is likely linked to ethanol blending (E20), where blended fuels may be recorded separately.

Consumption has grown 43% in five years, and demand is rising fast

Petrol consumption increased from about 28 million tonnes in 2020–21 to about 40 million tonnes in 2024–25, a rise of roughly 43%.

After the pandemic dip, demand rebounded quickly and has grown at about 9 to 10% annually. The 2025–26 figure of about 38.8 million tonnes (up to February 2026) suggests continued strong demand. While production has also increased, rising consumption means India must continuously secure crude supply to sustain refinery output.

Petrol consumption varies sharply across states

The all-India average petrol consumption is about 2.8 thousand metric tonnes per lakh population, but state-level differences are large.

High consumption:

• Goa: 14.3

• Puducherry: 11.3

• Chandigarh: 10.4

Low consumption:

• Bihar: 0.9

• West Bengal: 1.4

• Uttar Pradesh: 2.0

The gap between Goa and Bihar is about 16 times. This variation is driven by income, vehicle ownership, tourism, and urbanisation, among other factors.

India’s fuel security depends heavily on crude oil imports

India’s energy security is not determined by the petrol trade, but by its dependence on crude oil imports.

India’s crude oil imports increased from about 203 million tonnes in 2015–16 to about 243 million tonnes in 2024–25, a rise of roughly 20% over nine years. This steady increase reflects growing fuel demand driven by transport, industry, and economic activity.

There was a sharp dip in 2020–21 to about 196 million tonnes, primarily due to reduced demand during COVID-19 lockdowns. However, imports rebounded quickly, crossing pre-pandemic levels by 2022–23 and reaching their highest level in 2024–25.

India does not import petrol in significant quantities, but it imports the crude oil required to produce it. As a result, disruptions in global crude supply chains, especially through critical routes like the Strait of Hormuz, can impact refinery operations, fuel prices, and supply stability, even when domestic petrol production remains strong.

So, is there actually a petrol shortage?

There is no real evidence of a current nationwide shortage. India’s petrol production and storage levels do not indicate a crisis. Government, through a Special Purpose Vehicle called Indian Strategic Petroleum Reserve Limited (ISPRL), has established Strategic Petroleum Reserves (SPR) with a total capacity of 5.3 million metric tonnes (MMT), roughly 9.5 days of demand, while total storage capacity, including that of OMCs, is about 74 days, as per information shared by the government in the Parliament.  Currently, ISPRL has around 3.372 MMT of crude stock available, which is around 64 % of the total storage capacity. These reserves are meant for emergencies, not routine supply.

The Hyderabad situation was caused by a payment system change, not a supply shortage. When OMCs shifted to upfront payments, many dealers could not immediately procure fuel, leading to temporary stockouts. Panic buying worsened the situation, with demand doubling in a day and quickly exhausting available supply at some outlets.

While the Iran-Israel-USA conflict has increased crude oil costs due to risks in the Strait of Hormuz, it has not led to an actual shortage of petrol in India.

Why Does It Matter?
Petrol powers daily transport, logistics, and economic activity. The Hyderabad episode shows how quickly rumours can trigger panic buying and local shortages, even when fuel is available in the system.

The issue was not supply, but the payment shift & subsequent panic buying. At a broader level, India produces enough petrol but depends heavily on imported crude oil. This means global events, especially in regions like West Asia, can affect fuel supply and prices even without a domestic shortage. In simple terms, India is not short of petrol, but it is not independent of the raw material needed to produce it.

Key Numbers (from 2020-21 to 2024-25, in million tonnes)

Petrol Production
2020-21: 35.8 → 2022-23: 42.8 → 2024-25: 48.3

Petrol Consumption:
2020-21: 28.0 → 2022-23: 35.0 → 2024-25: 40.0

Crude Imports:
2020-21: 196 → 2022-23: 233 → 2024-25: 243

Highest per capita petrol consumption (2024-25):
Goa at 14.3 TMT per lakh population

Lowest per capita petrol consumption (2024-25):
Bihar at 0.9 TMT per lakh population

All-India average per capita petrol consumption (2024-25):
2.8 TMT per lakh population