India’s fuel demand growth forecast slashed 39% as PM urges conservation

India's transportation fuel demand growth forecast for 2026 has been revised down by 39% to about 78,000 barrels per day, down from an earlier estimate of 128,000 barrels per day, according to a report by Elif Binici, Lead Analyst at Kpler. The sharp revision comes as Prime Minister Narendra Modi urged citizens and government departments to conserve fuel, encourage remote working and reduce non-essential travel, with petrol and diesel prices hiked by about Rs 5 per litre each since May 15.

The rupee has weakened about 6% since the start of the US-Iran conflict and 10% over the past year, with foreign exchange reserves falling about 4.3% since late February. BMI, a Fitch Solutions Company, expects the rupee to weaken to Rs 97 per US dollar by end of FY2026-27 and to Rs 99 by FY2027-28 from Rs 95.4 currently.

On Monday, the rupee fell 0.2% to 95.6025 per dollar, its weakest in two weeks, amid sustained dollar buying by importers and after the Reserve Bank of India brought forward the end date for its discounted forex swap facility. Brent crude oil futures rose about 1% to $89.2 per barrel. The RBI is expected to raise rates by 25 basis points in February 2027, BMI said.