INDIA'S OIL DEMAND UP 3%Posted to WOGNEWS
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- Nov 22, 2019 4:43 pm GMT
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India's oil demand is projected to grow at a pace that will outstrip China's volume growth in oil demand by next year, setting alarm bells in India's petroleum ministry to urgently draw up action plan for oil conservation across the country.
Oil demand in India is projected to rise by 3.21 percent this year to 4.88 million barrels per day (mb/d), and further by 3.36 percent to 5.05 mb/d by next year, exceeding the 2.37 percent oil demand growth by China, according to the latest Oil Market Report by OPEC.
India's petroleum and natural gas minister Dharmendra Pradhan told the Rajya Sabha - the country's Upper House - that his ministry proposes to set in motion a massive multi-media campaign and action plan for oil conservation measures in the country.
The proposed oil conservation measures will include energy audits, and undertaking large-scale training of drivers and education programme for housewives on efficient use of domestic LPG.
Introduction of standard and labeling program for equipments using petro-based fuels such as LPG stoves, diesel irrigation pump sets and diesel generator sets will also be part of the action plan to conserve energy.
For India, the projections on the jump in oil demand will be a double whammy as it comes at a time when its domestic production of crude has been consistently falling in the last several months.
India’s crude oil production has fallen by over 6 percent during April-August this year compared to the corresponding period last year, according to the latest government data.
Oil industry analysts said with the estimated rise in oil demand and fall in domestic production, India’s dependence on oil import will go up significantly in the coming years and will put pressure on the country’s import bill and fiscal maths.
"The projected rise in oil demand will have an overall impact on India's economy, as this will push up imports and cause strains on the fiscal front," Tsunduru Muralidhar, an oil industry expert and independent oil sector consultant, told Arabian Business.
More than 80 percent of India's current fuel demand is met through imports. Middle East region accounts for about 60 percent of India's crude imports, with Saudi Arabia being a major supplier.
Industry analysts said geopolitical tensions, mainly in the Middle East, along with the US-China tensions casting uncertainty over global trade and economic growth, could cause volatility in crude prices, which will have adverse impact on the exchange value of rupee against US dollar, besides upsetting the the country's fiscal and current account deficit.