India's fuel demand climbed to an eight-month high in November, government data released on Friday showed, as festivals and a pick-up in industrial activity boosted sales in the world's No. 3 oil consumer.

Consumption of fuel, a proxy for oil demand, was 2.4% higher than the previous month, and rose 10.2% year-on-year to 18.84 million tonnes in November, according to the data from Indian oil ministry's Petroleum Planning and Analysis Cell (PPAC).

"The festive season has been supporting oil demand growth," said Refinitiv analyst Ehsan Ul Haq.

"Demand growth might slow slightly in the next few months as present expansion has been from a low base, but since the Indian economy is robust, we'll continue to see high consumption numbers," Ul Haq added.

Retail sales always peak during October-November, when the nation of 1.4 billion celebrates major festivals of Dussehra and Diwali.

India's factory activity in November expanded at its fastest pace in three months to 55.7, compared with 55.3 in October, showed the Manufacturing Purchasing Managers' Index , compiled by S&P Global.

Sales of diesel, which account for about four-fifth of India's refined fuel demand, were up 19.1% from 2021 at 7.76 million tonnes, while sales of gasoline, or petrol, rose 8.1% at 2.86 million tonnes, the PPAC data showed.

The rise in diesel demand "points to a strong economy," said Ul Haq, noting a pick-up in private as well as public transport demand along with a recovery in demand from the agricultural sector after the monsoon season.

Cooking gas or liquefied petroleum gas (LPG) sales increased 5.2% to 2.47 million tonnes, while naphtha sales fell 18.2% to 1.01 million tonnes. Sales of bitumen, used for making roads, rose 30.3% while fuel oil use edged up 8.4% in November. 

(Reporting by Kavya Guduru, Arpan Varghese and Brijesh Patel in Bengaluru; Editing by Sherry Jacob-Phillips)