02/10/2024 – 8:30
India's role in global oil markets will grow significantly over the remainder of the decade, driven by the strong expansion of its economy, population and demographics. With this perspective, the country should become the biggest driver of growth in oil demand between now and 2030, assuming a small margin of leadership compared to China, projects the International Energy Agency (IEA).
The Paris-based agency forecasts that India is on track to record an increase in its oil demand of nearly 1.2 million barrels per day, accounting for more than a third of the 3.2 million barrel increase. per day predicted for the entire globe by 2030.
The enormous industrial expansion means that diesel will be the most relevant product in this increase in demand in India. Demand for jet fuel is expected to grow strongly, at around 5.9% per year on average, but from a low base compared to other countries.
Regarding the demand for gasoline, the expected growth is, on average, 0.7%, as the expansion of the electric vehicle fleet across India will prevent a more relevant increase.
“New electric vehicles and improved energy efficiency will avoid an extra demand of 480 thousand barrels per day of oil in the period 2023-2030”, predicts the IEA. This means that without this gain, India's oil demand would reach a much higher level of 1.68 million barrels per day in 2030, compared to the current forecast.
As a result of the increase in demand, the IEA calculates that, over the next seven years, there will be an increase equivalent to 1 million barrels per day of new refinery distillation capacity. It will be the second largest increase in refining capacity among countries around the world, behind only China.
BIOFUEL
The IEA says that biofuels already play a fundamental role in the decarbonization of the transport sector in India. The South Asian nation is already the world's third largest producer and consumer of ethanol, as domestic production has tripled in the last five years.
With the abundance of raw materials, political support and effective implementation of guidelines, the ethanol blend rate of around 12% is among the highest in the world. And India has advanced its deadline by five years to double the national blend of ethanol in gasoline to 20% by the fourth quarter of 2026.
The agency, however, points out that achieving a 20% ethanol blend in such a short period of time faces several challenges, including the need for a rapid expansion of the supply of raw materials.
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