India is likely to be the largest driver of global oil demand growth between 2023 and 2030, narrowly surpassing China, the International Energy Agency (IEA) said on Wednesday (7 February).
India, which is the third-largest importer of oil globally, is on track to post an increase of almost 1.2 million barrels per day (bpd), accounting for more than one-third of the projected 3.2 million bpd global gains.
The agency predicts India’s demand would reach 6.6 million bpd in 2030, up from 5.5 million bpd in 2023.
"India will become the largest source of global oil demand growth between now and 2030, while growth in developed economies and China initially slows and then subsequently goes into reverse in our outlook," it added.
To meet this rising demand, India is expected to add 1 million bpd of new refining capacity by 2030, further increasing crude imports to 5.8 million bpd.
"Indian oil companies are investing heavily in the refining sector to meet the rise in domestic oil demand. Over the next seven years, 1 million bpd of new refinery distillation capacity will be added – more than any other country in the world outside of China," the IEA said.
Among products, diesel will be India’s single largest source of oil demand growth on the back of massive industrial expansion, accounting for almost half of the rise in the nation’s demand and more than one-sixth of total global oil demand growth through to 2030, the IEA said.
Jet-kerosene demand is poised to grow strongly, at around 5.9 per cent per year on average, but from a low base compared to other countries.
Gasoline will grow by 0.7 per cent on average, as the electrification of India’s vehicle fleet avoids a more substantial rise.
The electrification of India’s vehicle fleet will lead to a more muted 0.7 per cent annual growth average for gasoline, the IEA said.
New electric vehicles and energy efficiency improvements in India will avoid 480,000 bpd of extra oil demand from now to 2030, it added.
Kuldeep is Senior Editor (Newsroom) at Swarajya. He tweets at @kaydnegi.
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