India's fuel consumption in July fell by 4.3 per cent month-on-month to 19.43 million tonnes, oil ministry data showed on Wednesday.
India is the world's third-largest consumer and importer of oil. The data is a proxy for the country's oil demand.
Fuel demand in July fell four per cent year-on-year to 19.43 million tonnes from 20.24 million tonnes a year earlier, while June demand stood at 20.22 million tonnes, data on the Petroleum Planning and Analysis Cell's website showed.
Sales of gasoline, or petrol, fell 0.9 per cent to 3.49 million tonnes in July, compared with 3.52 million tonnes in June, but were up 5.8 per cent from levels seen a year ago.
Diesel consumption was down nine per cent on a monthly basis and totaled 7.36 million tonnes in July.
Cooking gas or liquefied petroleum gas (LPG) sales increased 10.3 per cent to 2.78 million tonnes month-on-month, while naphtha sales fell two per cent to one million tonnes.
On a yearly basis, LPG rose 4.9 per cent while naphtha sales fell about 18 per cent. Sales of bitumen, used for making roads, were 32 per cent lower in July, in comparison with June.
"The month-on-month drop in diesel is the result of the monsoon season, which reduced the need of irrigation in the agriculture sector. It probably also weighed on flight activity, with lower jet fuel demand," UBS analyst Giovanni Staunovo said. "Demand is expected to recover again as we move into the fourth quarter."
US President Donald Trump issued an executive order on Wednesday imposing an additional 25 per cent tariff on goods imported from India, saying the country directly or indirectly imported Russian oil.
Last week, the Indian owners of three vessels chartered to Nayara Energy asked the Russian-backed refiner to terminate their contracts after recent European Union sanctions, six sources familiar with the matter said.
India is likely to get average monsoon rainfall, critical to the economy, in August after receiving five per cent above-normal rains in July, a senior weather department official said last week.
(Reporting by Ishaan Arora and Sherin Elizabeth Varghese in Bengaluru)
