India’s petroleum product exports likely to wane during October-December 2026

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Robust domestic diesel demand and industrial activity may curb export availability

By Rishi Ranjan Kala

Updated - October 22, 2026 at 11:02 PM. | New Delhi, October 22

Oil Barrels with falling oil price graph istock photo for BL | Photo Credit: iStockphoto

India’s refined petroleum product exports, which have been on record streak during July to September in FY27, are expected to decline from their peak during the October-December quarter.

Sources said that India stands to benefit from the global diesel supply crunch, but the extent will depend on domestic consumption, inventory levels, refining margins and crude oil import costs.

Diesel consumption is expected to grow in the months ahead led by industrial and mining activity, freight intensity and agricultural consumption, which coupled with the festive and marriage season. This can potentially limit the additional volumes available for exports, explained one of the sources.

September data also point to a declining export intensity. The share of petroleum products in India’s gross exports (in value terms) stood at 10.9 per cent (provisionally) in September 2026--the lowest in the last four years. During September 2025, 2024, 2023 and 2022, the share in exports stood at 11.2 per cent, 11.8 per cent, 11.1 per cent and 15.7 per cent, respectively.

An executive with a domestic refiner said that diesel exports are likely to match the intensity of the last 3-4 months during October. A global diesel shortage helped Indian refiners in raising the share of petroleum products in India’s gross exports (by value) during July-September in FY27 to its highest in the last 12 quarters.

Export intensity

Kpler said that India is well positioned to benefit from the ongoing global diesel supply crunch, given its large, complex refining capacity, diversified crude sourcing and strong export infrastructure.

“Indian refineries have been operating at over 100 per cent utilisation, supported by relatively limited maintenance activity this year, barring a few refinery-specific turnarounds and unplanned outages. This has allowed Indian refiners to maximise throughput, capitalise on elevated diesel cracks and supply markets across Asia, Africa, Europe and even the US,” it added.

Sumit Ritolia, Kpler’s Lead Research Analyst for Refining & Modeling, pointed out that continued access to competitively priced crude, including Russian barrels, has further supported refining economics. Higher diesel exports and stronger refining margins will certainly help cushion the impact of India’s elevated energy import bill, generating additional export revenues and improving refinery profitability. However, this is unlikely to fully offset the increase in crude import costs, given India’s substantial dependence on imported oil.

“At the same time, India’s domestic diesel demand is also increasing, with relatively stable retail diesel prices playing a particularly important role. Unlike many Western markets, where higher international oil prices are more directly passed through to consumers, India’s retail diesel prices have remained largely unchanged despite elevated global prices,” he told businessline.

This has shielded domestic consumers from international price volatility and limited demand destruction, he added.

Other factors

Alongside stronger industrial activity, freight movement, agricultural consumption and the festive season should support robust domestic diesel demand through October-December, potentially limiting the additional volumes available for exports, Ritolia said.

“Ultimately, India stands to benefit from the global diesel supply crunch, but the extent of that benefit will depend on rising domestic consumption, export availability, refining margins and higher crude import costs,” he explained.

Published on October 22, 2026

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