The country's fuel demand recovered last month after slumping to a nine-month low in May, as restrictions to curb the spread of the pandemic were eased and mobility picked up.
Fuel consumption, a proxy for oil demand, rose eight per cent from May to 16.34 million tonnes, data from the Petroleum Planning and Analysis Cell (PPAC) of the Ministry of Petroleum & Natural Gas showed on Friday.
A second COVID-19 wave, which stalled mobility and dulled economic activity, dragged fuel consumption to its lowest since August in May.
Pandemic infections have, however, eased from May's peak, prompting a 1.5 per cent year-on-year increase in fuel demand last month.
"Going forward we see road fuel demand reaching pre-pandemic levels by the end of the year since the vaccination program has already come a long way," said Rystad analyst Simen Eliassen, adding that jet fuel could also recover by 115,000 bpd.
However, Eliassen cautioned that new coronavirus variants and mutations could pose a risk to the recovery.
A senior government official said on Friday India's devastating second coronavirus wave was not yet over. Concerns over a new Delta Plus COVID-19 variant has also clouded the nation's economic outlook.
Diesel consumption, which accounts for about 40 per cent of India's refined fuel sales, fell 1.6 per cent year on year to 6.20 million tonnes, but rose 12 per cent from May.
Sales of petrol, increased by about 5.7 per cent from the same period last year and jumped 21 per cent from May to 2.41 million tonnes.
Sales of cooking gas, or liquefied petroleum gas (LPG), rose 9.7 per cent to 2.26 million tonnes year-on-year, while naphtha sales dropped by about 3.1 per cent to 1.19 million tonnes.
Sales of bitumen, used for making roads, were down 32 per cent from a year ago, while fuel oil rose 1.9 per cent.