India's thirst for oil to fuel global demand

In a noteworthy development, India's petroleum consumption reached an unprecedented high last year, signalling a trajectory that could see the country surpass China as the foremost contributor to the global surge in oil demand by the end of this decade.

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Various factors such as urbanization, industrialization, and the burgeoning middle class have fuelled a rapid upswing in the consumption of petroleum products. This includes usage in heating, lighting, cooking, transportation, and petrochemicals.

Unlike China, where an increasing demand for transportation is being met by electric vehicles, India primarily relies on internal combustion engines due to their affordability, maintaining a dominant share in the market.

While China is anticipated to witness a peak in oil consumption before the decade concludes, India’s consumption is projected to keep rising throughout the 2030s. Already positioned as the second-largest driver of incremental consumption globally, India is poised to secure the top spot before 2030, showcasing the nation’s pivotal role in shaping global consumption patterns.

Official data from the Ministry of Petroleum and Natural Gas reveals that India’s petroleum consumption surged to 231 million tonnes in 2023, compared to 219 million tonnes in 2022. Despite setbacks caused by the COVID-19 pandemic, consumption rebounded, trailing the pre-pandemic trend for 2015-2019 by only 6 million tonnes.