India's oil demand to peak later than in other major economies: S&P Global Commodity Insights

The global commodities information services provider, in a note, said while alternative fuels are gradually shifting energy consumption patterns away from fossil fuels, the fossil fuel usage will remain significant in the foreseeable future.

Notably, India's refined product demand grew 3 per cent year-over-year in 2024, compared to flat growth in China

"Despite India's demand being approximately one-third of China's, the rising population and increasing per capita income will keep India in focus," said Abhishek Rajan, South Asia oil research lead, S& P Global Commodity Insights, ahead of the much-awaited India Energy Week 2025.

IEW 2025 is scheduled to take place from February 11-14 in New Delhi's Yashobhoomi.

At S&P Global Commodity Insights, they forecast that India's refined product demand will reach 5.7 million barrels per day (b/d) by 2026.

"While we do not expect this demand to peak until 2050, the significant rise in the adoption of electric vehicles (EVs) and alternative fuel vehicles will exert pressure on India's transportation fuel demand," said Abhishek Rajan of S&P Global Commodity Insights.

Additionally, a planned capacity increase is set to bolster India's production capabilities.

Upcoming projects include refinery in Barmer, Rajasthan by Hindustan Petroleum Corporation Ltd and expansion projects in Indian Oil Corporation Ltd's Barauni, Koyali, and Panipat refineries.

"While India is a significant exporter of refined products now, the completion of these projects and timely planning/ execution of the future projects will be crucial for maintaining a steady domestic supply as well healthy exports in the long term," said Rajan.

India depends on imports for over 80 per cent of its crude oil requirement. Various steps have been taken by the government to increase the production of domestic crude oil and bring down imports. (ANI)