crude oilImage Credit source: Photos Credit Getty images
As soon as the price of crude oil increases, the first impact common people see is at the petrol pump, but its real story is much bigger than this. The reality is that not only petrol is made from crude oil, but many types of fuels and industrial products are also prepared from it. Apart from petrol, essential products like diesel, LPG, jet fuel, bitumen and petrochemicals are also made from crude oil, which meet the needs of transport, industry, construction and household.
One barrel contains 159 liters of crude oil. About 42 percent petrol, 27 percent diesel, 10 percent jet fuel and the rest LPG, lubricants and other products are made from this one barrel. The role of diesel is considered most important in India. According to FY26 data, diesel consumption stood at about 94.7 million tonnes, which is about 40 percent of the total petroleum consumption. Diesel runs trucks, buses, trains, farming equipment and construction machinery, keeping the country’s supply chain and infrastructure strong. While petrol is essential for personal vehicles, diesel accelerates the entire economy from village to city.
Apart from transport, where is oil used?
Apart from this, a large part of crude oil is not only used in transport but is also used in other sectors. LPG consumption in India is 33.2 million tonnes, which is necessary for homes and commercial purposes. Naphtha is used in the petrochemical industry, from which plastics, packaging and synthetic products are made. Apart from this, petroleum coke and bitumen are used in industry and road construction, while lubricants and fuel oil help in running machines.
This is how it affects the economy
If there is any interruption in the supply of crude oil at the global level, its impact is not limited to fuel only but affects the entire economy. Due to diesel becoming expensive, transport costs increase, household expenses increasing due to LPG becoming expensive, production costs increasing due to petrochemicals becoming expensive and air travel also becoming expensive due to jet fuel becoming expensive. In this way, a small supply problem affects every sector by increasing inflation.
Why is crude oil important for India?
It is also important for India to understand crude oil because the country imports a large quantity of it and its demand is continuously increasing. Due to tensions in West Asia, oil prices have increased in recent months, due to which India’s import bill has also increased. Even though there has been a slight decrease in imports, there has been a huge increase in total expenditure.
Inflation depends on crude oil
Even a small increase in the price of crude oil directly affects the pocket of the common man. Due to diesel becoming expensive, the price of goods increases, LPG becoming expensive affects the household budget and due to increase in industrial costs, inflation increases. Despite this, demand in India remains strong and a 3.2 percent increase in consumption has been recorded in March 2026. This is why stable supply of crude oil is very important for the economic stability and development of the country.
