India will become the largest source of global oil demand growth between now and 2030 as industrial expansion boosts transport fuel use, the Paris-based IEA said this week.
"The massive industrial expansion means that diesel/gasoil is the single largest source of oil demand growth, 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 agency's India Oil Market Outlook report said.
The IEA forecast India's gasoil demand to grow by 540,000 b/d over the seven-year period, at an annual average growth rate of 4.5pc, mostly driven by increasing use of commercial transportation trucks. It said this will account for about one-third of non-OECD gasoil growth and will be more than the net worldwide rise for gasoil demand as OECD use declines.
Annual growth in Indian gasoline demand is forecast to be just 0.7pc, because of an increase in electric vehicle use and biofuels uptake, even though the agency projected a more than 40pc growth in the size of India's car fleet by 2030.
Energy supply security
The IEA also said India will become more reliant on crude imports, and "increased attention is needed on its security of supply."
"India needs to enhance its capacity to respond to possible oil supply disruptions by implementing and strengthening its strategic petroleum reserve (SPR) programmes and improving oil industry readiness," the agency said without elaborating on the possible disruptions. The IEA estimated India's crude stocks at 243mn bl, around 66 days of net import cover, of which 26mn bl are in the SPR.
India is planning to lease out around 1mn t of vacant strategic crude storage capacity to domestic and international companies, India Strategic Petroleum Reserves' (ISPRL) managing director L.R. Jain said at India Energy Week (IEW) this week.
The IEA said a structural shortfall in LPG supplies is likely to increased the need for imports, although India maintains higher export potential for light and middle distillates. India's is targeting an increase in refining capacity to 450mn t/yr (9.04 mn b/d) by 2030 from around 254mn t/yr (5.1mn b/d) presently, prime minister Narendra Modi said at IEW this week. He said India's primary energy demand is likely to double by 2045.
India is a net importer of crude, bringing in more 80pc of its needs, and is a major consumer and a net exporter of oil products.
