Panic Buying Drives Petrol Demand Spike as Tensions Ease Later

Fuel anxiety in India appears to be easing after tensions in the Middle East subsided and Iran confirmed that the Strait of Hormuz would stay open during the ceasefire. Earlier, when the conflict escalated in March, concerns over supply disruptions triggered unusual consumer behavior across the country.

During that period, long lines formed at petrol stations in several cities as people rushed to stock up. Motorists filled not only their vehicle tanks but also extra containers, and fuel outlets reported significantly higher foot traffic than usual. This surge reflected fears that global instability could disrupt energy supplies.

Government data supports the idea that this was more than just perception. According to the Petroleum Planning & Analysis Cell (PPAC), fuel consumption rose sharply in March. Diesel usage climbed to 8.72 million tonnes from 7.66 million tonnes in February, while petrol demand increased to 3.77 million tonnes—its highest level in recent months. The timing of this spike aligns closely with heightened geopolitical tensions, suggesting precautionary buying rather than normal demand growth.

In contrast, LPG consumption showed an unexpected decline. Despite reports of queues at booking centres, usage dropped to 2.38 million tonnes in March. This could be linked to rising prices of commercial LPG, which may have pushed restaurants and small eateries to reduce operations or temporarily close. Households might also have limited usage due to cost pressures, even as concerns about availability remained high.

Online search patterns mirrored this public unease. Data from Google Trends shows a sharp increase in searches related to petrol toward the end of March, coinciding with peak fears of shortages and price hikes. Searches for LPG rose earlier in the month but declined more quickly, indicating a shorter-lived spike in concern. Interestingly, there was also a rise in searches for induction cooktops, hinting that people were exploring alternatives to gas for cooking.

Regionally, this concern was not uniform. Northern and eastern states such as Uttar Pradesh, Bihar, and Delhi recorded the highest levels of LPG-related searches, indicating stronger anxiety there. In comparison, southern parts of the country showed relatively lower levels of concern.

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