Diesel Isn't Dead Yet

DECODE THE NEWS

There Is A Fuel Shift Happening, But The Diesel Story Is Far From Over

What? 

Most Indians are spotting more EVs on the road. Be it electric cars, e-rickshaws or receiving deliveries on e-bikes, EVs are visibly and statistically growing in India. Yet, the fuel mix is not changing drastically.

Even as fewer people are buying diesel cars, when it comes to long-haul transport, diesel or HSD is still ruling the fuel game.

The ‘death of diesel’ debate had come to the fore as FY25’s diesel sales grew a mere 2%, which is less than the 4.3% growth seen in FY24 — and much slower than the 12.1% seen in FY23, as per data by the Petroleum Planning and Analysis Cell (PPAC).

Why The Slowdown?

Some experts point to a variety of factors at play in diesel sales. India's GDP is projected to grow at around 6.5% in FY25, which was at 8.2% in FY24, leading to a slowdown in consumption.

“The slowdown in diesel consumption growth seems to reflect the broader cooling of economic activity. Even a small dip in freight activity can significantly reduce overall diesel consumption,” said Kshiteej Mishra, practice member, mobility, energy and transportation at Praxis Global Alliance.

A few others, however, ascribe it to the cyclical nature of diesel sales rather than a major shift in the way the product is consumed.

“If you look at the last 8-9 years, the CAGR (compounded annual growth rate) of diesel has always been around 2%. The year of FY23 was a blip year due to the post-pandemic consumption, so we should not compare it to that. If you see, April 2025’s sales have already grown at 4%,” explains an academic expert who tracks fuel consumption.

What Does This Mean?

The core sector growth slowed to an eight-month low in April of 2025. Three out of eight sectors — crude oil production, refinery output and fertilisers — contracted in April.

The data indicates that farm production, as well as fuel consumption, has been slowing for a while now.

This is perhaps an indicator of why diesel demand has been low, though it picked up comparatively in April 2025.

Diesel keeps the economy running, and might continue to do so for a long time now. While a few alternatives are chipping away at some of its utilities, green and clean fuels have a long way to go before there is a structural shift.

Yet, in the wake of global tensions as well as consumption worries, diesel growth might waver in the short term, even as its long-term utility remains unquestioned at least for the next six to seven years.

MESSAGE FROM OUR SPONSOR

BUILD ON BLOCKCHAIN

Blockchain: The Truth Serum For ESG Claims

In the past decade or so, most businesses across the globe have been striving to perform well on ESG (environmental, social, and governance) criteria to meet growing investor demands, comply with new-age regulations, enhance reputation, reduce risk, satisfy consumers, and get easy access to capital.

At the same time, several companies, including industry leaders, have been penalised by regulators for fudging sustainability data and presenting themselves as ESG-compliant, though their actual practices are below the mark.

In April this year, German prosecutors fined asset manager DWS €25 million ($27 million) after a probe found the firm guilty of greenwashing and making misleading statements about its environmental and social investing credentials. DWS had publicly claimed that ESG was an integral part of its DNA.

Closer home, Adani Green’s recent questionable governance practices put several ESG fund managers on the wrong side of the sustainability narrative.

Building A Good ESG Reputation

As companies make grand promises to go green, adopt sustainable practices, and meet high standards of corporate governance, it’s becoming a challenge to assess and verify what they’re really doing. 

Without proof, it’s hard to tell whether a company is actually recycling materials, or reducing emissions, or sourcing raw materials ethically as it claimed in its sustainability reports.

That’s where blockchain can come to the rescue of all stakeholders. 

This series is brought to you in partnership with Algorand. 

CORE NUMBER

$1.5 billion

That’s how much Foxconn will invest in its India unit Yuzhan Technology, according to a Reuters report, as Apple accelerates its shift away from China amid escalating U.S. tariffs. The move follows Apple’s production of $22 billion worth of iPhones in India during FY25—a 60% jump from the year prior, though India still accounts for just 20% of global output. Apple now aims to assemble most U.S.-bound iPhones in India by 2026. This expansion proceeds despite U.S. President Donald Trump’s objections, after he reportedly told Apple CEO Tim Cook not to “build in India.”

Infrastructure Growth Dips! India’s core sector growth slowed sharply to 0.5% in April 2025, down from 4.6% in March, an eight-month low. The eight core sectors — coal, crude oil, natural gas, refinery products, fertilisers, steel, cement, and electricity — make up 40% of industrial production. Cement and steel grew 6.7% and 3%, respectively, while coal rose 3.5%. Crude oil and fertilisers declined 2.8% and 4.2%. Natural gas edged up 0.4%, and electricity output rose 1%. Cumulative core sector growth for April-March 2024–25 stood at 4.5%, year-on-year.

ED Probes EaseMyTrip Co-founder. Nishant Pitti, co-founder of EaseMyTrip, is under investigation by the Enforcement Directorate (ED) in connection with the Mahadev betting app scandal and alleged market manipulation. As per The Economic Times, ED claims Pitti was linked to Sky Exchange, an illegal better firm, made payments to related shell firms, and accessed insider shareholder data (Benpos) to influence stock prices. This comes weeks after Pitti stepped down as CEO and sold shares worth Rs 78 crore. Pitti denies all charges, calling the allegations baseless and stating that all financial holdings are properly declared.

India Makes the Dirtiest Steel. Steel production contributes 10 percent to global carbon emissions, and a Bloomberg report says India leads the pack when it comes to making polluting steel. Though China still produces the most steel, India’s steel furnaces are still powered by coal. The global steel sector will only reach net zero emissions if India makes a serious shift to powering its factories with electric arc furnaces and direct reduced iron rather than fossil fuels. 

Early Monsoon Alert! The southwest monsoon is likely to hit Kerala within 4–5 days, ahead of the usual June 1 date, marking the earliest onset since May 23, 2009, the India Meteorological Department (IMD) said on Tuesday. The IMD had earlier predicted a May 27 arrival, The Economic Times reported. This early onset aligns with its April forecast of above-average rainfall, all thanks to the absence of El Niño. The monsoon is crucial for India’s agriculture-dependent economy, impacting irrigation, reservoirs, and power. In 2023, it arrived on June 8; in 2022, on May 29.

😒 UGHH

We’re two months into FY 2025–26, but EPF interest for FY 2023–24 is still missing. The Employees' Provident Fund Organisation (EPFO) confirmed the delay in a reply to a user on X (formerly Twitter), sparking the usual social media backlash. This delay has sparked renewed frustration online, as EPFO continues to face heat over poor grievance redressal, non-functional dashboards, and high claim rejection rates. The Centre is reportedly working on a full overhaul of the system, but ideas like EPF withdrawals via ATMs remain in early discussion stages with no clear timeline.

PODCAST

On Episode 586 of The Core Report, financial journalist Govindraj Ethiraj talks to Mirai Chatterjee, Director at Self-Employed Women’s Association, or SEWA as well as K. Ramakrishnan, Managing Director - South Asia at Worldpanel Division, Kantar. 

• Markets slide down

• Monsoon is arriving even earlier than the early projections

• How Chinese businesses are gearing up for a new trade world even if the tariff tantrum goes away

• How Gujarat-based women’s organisation SEWA wants to use blockchain to help women in poorer sections of society build their identities

• Tracking FMCG sales trends with Kantar…how categories like home care are showing unusual growth

👥 THE TEAM

✍️ Zinal Dedhia, Salman SH, Kudrat Wadhwa | ✂️ Rohini Chatterji | 🎧 Joshua Thomas