New Delhi: A day after Prime Minister Narendra Modi publicly appealed for the public to cut down the use of transport fuel, economists and farmer groups said agriculture was a prime sector that could scale back diesel consumption.
Apart from private, public and commercial transport, diesel is used in agriculture and industries. India's farm sector accounts for about two-fifths of the country's annual diesel demand of about 92 million tonnes.
With concerns mounting over fuel costs and energy security, policymakers and experts are increasingly advocating rationalization of diesel consumption in the agriculture sector by promoting cleaner and cost-effective alternatives such as biofuels, biomass and compressed biogas (CBG).
“The existing use of diesel in the agriculture sector needs rationalization. There is a need to tap alternative sources of energy such as biofuels, biomass and CBG,” said Shweta Saini, an agricultural economist and founder and chief executive officer of Arcus Policy Research. “E85 fuel — a blend of 85% ethanol and 15% gasoline — has the potential to emerge as a gamechanger in India’s agricultural and energy strategy, particularly for powering tractors and harvesters."
Agricultural economists pointed out that diesel prices have a direct impact on cultivation costs, particularly during sowing and harvesting seasons. A shift towards alternative fuels may help improve farm profitability in the long run. So, the transition towards alternative energy sources can significantly reduce input costs for farmers while also supporting the country’s climate commitments.
Experts said compressed biogas generated from agricultural residue and organic waste can emerge as a viable fuel substitute for rural transport and farm equipment. This could help address the issue of stubble burning by creating economic value from crop residue.
Farmers willing
“Fuel is a major input cost in agricultural production, and farmers are willing to shift to any alternative fuel provided it is affordable and easily accessible,” said Bharat Pundir, a farmer from Saharanpur district in Uttar Pradesh. “The initial cost of machinery running on alternative fuels or the modifications required in existing machines as well as the fuel should be affordable for farmers.”
Modi stressed on the use of public transport and work from home – as observed during the Covid-19 pandemic.
"Petrol, diesel have become very expensive globally. It has increased significantly. It is the responsibility of all of us that the foreign exchange spent on oil should be saved by saving petrol and diesel," Modi said at a rally in Hyderabad.
The statement comes as kharif sowing is set to start in the country next month. Summer crops accounted for 5.34% of India’s total food grain production of 357.73 million tonnes in FY25, while kharif and rabi crops contributed 47.3% and 47.2%, respectively.
The government has so far maintained that there are adequate stocks of petrol and diesel. Mint reported earlier about farmer lobbies raising concerns over curbs on the sale of diesel in portable containers following the West Asia war. Already, prices of industrial diesel have been increased, and stringent norms have been put in place to discourage the loose sale of diesel.
Further, the possibility of below-normal rainfall has already raised concerns for the country's agriculture sector this year. The southwest monsoon, which waters most of India's farmlands, may be just 92% of its 50-year average this year, according to the India Meteorological Department (IMD).
The country remains heavily dependent on the southwest monsoon rains, which account for more than 70% of its annual precipitation. Adequate rainfall boosts the farm economy and strengthens rural demand.
At present, about 55% of India's net sown area is irrigated, leaving the rest reliant on rainfall. Any decrease in rainfall will increase irrigation costs for farmers.
Adequate grain stocks
However, government data shows that India’s central pool foodgrain stocks remained significantly above the prescribed buffer norms throughout FY26, reflecting a comfortable supply position. Total foodgrain stocks stood at 60.4 million tonnes as of 31 March, more than the buffer requirement of 21.04 million tonnes.
Wheat stocks were at 21.79 million tonnes on 31 March while rice stocks were at 38.61 million tonnes. Both were well above the buffer requirements, indicating ample availability to meet public distribution system requirements and other welfare schemes.
Experts suggested that the prolonged war and India’s import dependence for crude oil would impact the country's fiscal situation and fuel availability.
"India is too much dependent on imported crude and LNG (liquefied natural gas),” said Kirit Parikh, former member (energy) at the erstwhile Planning Commission of India. “The government may have to increase prices going ahead. We cannot go on piling deficits for the government for ever and ever. Work from home, carpooling and use of public transport would be effective measures in the near term."
India imports 90% of its crude oil requirements. The country imported oil worth $121.8 billion in FY26.
India's demand for petroleum products has hit record levels for the past few years, led by diesel consumption. In FY26, total product consumption was 244 million tonnes, a figure projected to hit a record 250 million tonnes in the current fiscal.