India would overtake China as the biggest driver of global oil demand in 2027 as transportation and industry consumption in the world’s fastest-growing major economy would drive growth despite a big push for clean energy and electrification, the International Energy Agency (IEA) said on Wednesday.
The Paris-based agency in a special Indian Oil Market Outlook to 2030 report released at the India Energy Week here, said the country’s oil demand will rise from 5.48 million barrels per day in 2023 to 6.64 million in 2030.
China currently is the biggest driver of oil demand and India ranks number 2 in growth. The numbers given by IEA in the report seem to talk of crude oil processed into fuel for domestic as well as for exports. The domestic consumption as per the oil ministry data is around 5 million barrels per day (bpd). “India’s oil demand will grow at a rapid pace by 2030 despite accelerated green energy moves,” IEA director of energy markets and security Keisuke Sadamori said.
But in absolute terms, demand in India will still lag China’s even in 2030. “As oil demand slows in developed countries and China, India becomes the largest source of growth,” said Toril Bosoni, head of oil industry and markets division, IEA.
India currently is the third largest consumer of oil behind the US and China. It imports 85 per cent of its oil needs and this dependence is likely to rise as domestic production falls. Diesel, she said, accounts for about 50 per cent of Indian gains and 20 per cent of global demand growth to 2030.
Meanwhile, India made a pitch for drafting a predictable trajectory to cleaner fuel for an orderly energy transition, saying a balanced and realistic dialogue is needed and not vilification of fossil fuel. Speaking at the India Energy Week, Oil Minister Hardeep Singh Puri said the world’s third largest energy consumer is exploring options to diversify its oil purchases, including the possibility of picking up opportunity cargoes, such as those available from Russia and Venezuela.
The recent reforms in the sector, including diversification of sources of imports and changes in gas pricing mechanism, ensured that prices of petrol and diesel in India declined while the global prices were shooting up, he said.