The Aryavarth Express
Agency(New Delhi): According to a recent report titled ‘Indian Oil Market Outlook to 2030’ released by the International Energy Agency (IEA) at the second edition of India Energy Week 2024 in Goa, India is poised to become the largest source of global oil demand growth from now until 2030. This projection comes as growth in developed economies and China is expected to slow down and then reverse.
The report attributes this significant growth in India’s oil demand to a combination of factors, including robust economic expansion, population growth, urbanization, industrialization, and the rising prosperity of the middle class. These elements are creating a strong demand for mobility, tourism, and access to clean cooking facilities, all of which are pivotal in driving the expansion of oil demand in the country.
India’s oil consumption is expected to increase by nearly 1.2 million barrels per day (mb/d), accounting for over a third of the projected 3.2 mb/d global gains, reaching 6.6 mb/d by 2030. The report identifies diesel/gasoil as the single largest source of oil demand growth in India, contributing almost half of the rise in national demand and over one-sixth of the total global oil demand growth through to 2030.
Additionally, jet-kerosene demand in India is set to grow at an average of around 5.9% per year. However, gasoline growth is projected at 0.7% on average, as the electrification of India’s vehicle fleet is expected to moderate the increase. The petrochemical industry’s investment in production facilities is likely to boost feedstock demand, rounding out the growth picture.
The Indian government’s initiative to bring clean cooking programs to rural populations has led to a near tripling of LPG imports over the past decade. This trend is expected to continue, contributing to demand growth through 2030.
The report also highlights that Indian oil companies are making substantial investments in the refining sector to meet the rising domestic oil demand. Over the next seven years, an additional 1 mb/d of new refinery distillation capacity is expected to be added, surpassing any other country outside of China. This expansion could further increase if several large projects under consideration materialize.
Moreover, the report notes that new electric vehicles (EVs) and energy efficiency improvements are expected to reduce an additional 480 kb/d of oil demand from 2023 to 2030. Biofuels, particularly ethanol, are also anticipated to play a significant role in India’s transport sector decarbonization. India’s current ethanol blending rate is among the highest globally, and the country has advanced its deadline for doubling nationwide ethanol blending in gasoline to 20% by the fourth quarter of 2026.
India Energy Week 2024, held in Goa from February 6-9, serves as a catalyst for India’s energy transition goals. It is India’s largest all-encompassing energy exhibition and conference, bringing together the entire energy value chain. The event focuses on integrating startups into the energy sector and is expected to feature participation from numerous energy ministers, over 35,000 attendees, and more than 900 exhibitors.
This significant development in India’s energy landscape highlights the country’s growing influence in the global oil market and underscores its pivotal role in shaping future energy trends.