NEW DELHI: India will remain hooked to oil for another quarter of a century, with demand seen more than doubling to 11 million barrels a day by 2045 in spite of the Narendra Modi government’s focus on faster transition to clean energy, leaving fuel consumers vulnerable to crude market volatility.
According to Opec World Oil Outlook 2021, the contribution of diesel and petrol to the country’s oil demand will rise from 51% to 58% through 2045 on the back of an expanding population, growing prosperity and rapid urbanization between 2020 and 2045.
The latest long-term market outlook from the grouping of oil exporters, which accounts for about 40% of global oil supply, expects oil to make up 28.6% of the India’s primary energy mix in 2045, marking an increase of more than 3 percentage points compared to 2020, boosted by an expected addition of 200 million passenger cars and spelling a tepid pace for adoption of electric mobility.
The rising oil demand will also push up India’s dependence on imports in the face of stagnating oil and gas production. This will directly impact consumers by pushing up fuel prices when oil flares up such as in recent weeks when petrol and diesel prices have begun to crawl up as crude hit $80 a barrel in a volatile market.
The report expects gas consumption to grow by 5.4% annually, outpacing total energy demand growth, boosted by rapid expansion in city gas networks and adoption of CNG (compressed natural gas) vehicles. But it doubts this may not be enough to meet the government's target of raising the share of gas in India's energy basket to 15%.
The government focus on cleaner fuels and renewables will, however, reduce the share of coal in primary energy demand from 43.5% to 36.3% in 2045 but it will still be the top energy provider among all sources in 2045.
The report sees per capita energy consumption almost doubling from 4.65 boe (barrels of oil equivalent) in 2020 to 8.56 boe in 2045 on the back of an annual GDP growth rate of above 6% for the next 15 years, making India the fastest growing emerging economy.
India accounts for around 18% of the world’s population but uses only about 7% of the world’s primary energy, with per capita energy consumption pegged at 4.7 boe against the global per capita average of 13.2 boe.
Source:thetimesofindia.com