Crude oil demand of India to shoot up to 500 million tonnes per year by 2040

Singapore:  The crude oil demand of India is forecast to shoot up to 500 million tonnes per year by 2040, but constant increases in oil prices might act as a dampener for the rate of growth according to Indian Oil Corporation.

India will consume around 10 million barrels per day (bpd) which is more than double as compared to 4.7 million bpd in 2017 as per prediction.

During Asia Pacific Petroleum Conference (APPEC) in Singapore, an executive at Indian Oil Corp, Partha Ghosh said that global oil demand will increase by 15.8 million bpd from now until 2040. India’s growth of 5.9 million bpd will make up about 24 percent of the overall gain, he said.

"The new and existing refineries continue enhancing their infrastructure in India. So the refining capacity of India would increase to about 439 million tonnes per year by the financial year of 2030, while domestic demand is forecast to increase to 356 million tonnes per year over the same period," Ghosh said.

On the sidelines of the conference Ghosh said In the future, about five to seven years down the line, when more refineries with bigger capacities come up, better infrastructure will come along with that. Higher refining capacity will mean India could export more refined oil products to countries in the region.

“Even if the domestic demand does not grow because of high prices in India, refineries will be competitive enough to actually supply products to the entire region, be it East Africa or Asia,” he said.

"The rate of oil demand growth, however, will slow down by 2024 to 2025 due to alternatives and energy efficiency, the biggest dampening factor will come from a sustained increase in oil prices," he added.

India is a major buyer of Iranian oil and is seeking a waiver on the sanctions the United States is set to impose on the country in November.

However, Indian Oil will be able to manage even if it does not gain an exemption, Ghosh said.