Consumption of fuel, a proxy for oil demand, totalled 17.04 million tonnes, data from the Petroleum Planning and Analysis Cell (PPAC) of the oil ministry showed.
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India's fuel demand rose 2.8 percent in August compared with the same month last year.
Sales of gasoline, or petrol, were 8.9 percent higher from a year earlier at 2.57 million tonnes.
Cooking gas or liquefied petroleum gas (LPG) sales increased 13.0 percent to 2.40 million tonnes, while naphtha sales surged 3.7 percent to 1.15 million tonnes.
Sales of bitumen, used for making roads, were 23.8 percent up, while fuel oil use edged lower 15.9 percent in August.