Fuel demand fell to its lowest in more than two years in September, data from the Petroleum Planning and Analysis Cell (PPAC) showed.
Consumption of fuel, a proxy for oil demand, totaled 16.01 million tonnes - its lowest since July 2017 - down about 0.3 per cent compared with the same month last year.
Meanwhile, consumption of diesel, which is widely used for transportation as well as for irrigation needs in India, slipped more than 3 per cent year-over-year to 5.83 million tonnes, its lowest since January 2017.
Sales of petrol were 6.3 per cent higher from a year earlier at 2.37 million tonnes.
Cooking gas or liquefied petroleum gas (LPG) sales increased nearly 6 per cent to 2.18 million tonnes, while naphtha sales slumped 26 per cent to 0.84 million tonnes.
Sales of bitumen, used for making roads, were 7.3 per cent lower, while fuel oil use edged lower 3.8 per cent in September.