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India’s Oil Demand To Grow Faster Than Any Other Major Economy

Tsvetana Paraskova

By 2040, India’s oil consumption is set to increase at the fastest pace than any major economy in the world as the country is becoming increasingly influential in global energy markets, the International Energy Agency (IEA) said in its first in-depth review of India’s energy policies launched on Friday.

India’s total energy demand is expected to double by 2040, while demand for electricity could even triple, due to the rising population and the fast-growing economy, the IEA said about India, which has been an IEA association country since March 2017.  

Currently, India is the world’s third?largest consumer of oil, the fourth?largest oil refiner, and a net exporter of refined products. India’s oil demand growth rate is expected to surpass the growth pace of China in the middle of the 2020s, making India a very attractive market for refinery investment, according to IEA’s report.

India’s oil import dependency is set to rise significantly in coming decades, from an already high dependency of over 80 percent in 2018. 

Therefore, India is making energy security a priority in its policies, the Paris-based agency said.

“India’s coal supply has increased rapidly since the early 2000s, and coal continues to be the largest domestic source of energy supply and electricity generation,” the IEA said.

At the same time, the agency highlighted the strong growth of renewable energy deployment across India, especially solar power.  

At present, renewables account for nearly 23 percent of India’s total installed electricity generation capacity.

Related: Australia Becomes Top LNG Exporter Despite Bushfire Crisis

Last month, India’s Oil Minister Dharmendra Pradhan said that India would surpass China to become the world’s largest energy growth driver by 2030.

Commenting on IEA’s report, Pradhan said on Friday:

“We have taken note of IEA’s recommendation for reinforcement of India’s oil emergency response policy. Enhancing international engagement on global oil security issues is already an active goal being pursued by my Ministry. Energy has become an essential commodity in our bilateral trade engagements with several key trading partners and in positioning India as an important strategic player in global energy landscape.”  

By Tsvetana Paraskova for Oilprice.com

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