India’s Oil Demand To Reach 7.1 Mn b/d By 2035

India’s total petroleum product demand is projected to rise by almost 2 million b/d to reach 7.1 million b/d by 2035 from 2023 levels, according to S&P Global. This will likely be led by transportation as demand for diesel and gasoline grows.

 “Additionally, jet fuel and naphtha will be key growth products as the prospering economy ramps up consumption of aviation and petrochemicals,” said S&P.

Similarly, liquefied petroleum gas demand is expected to grow 41 per cent until 2035, from 0.9 million b/d in 2023, supported by a continuous push for cleaner cooking fuel. India is expected to remain a net exporter of gasoline, diesel, jet fuel, naphtha and fuel oil, while dependency on LPG imports is expected to increase. 

S&P Global in its first edition of “India Forward: Emerging Perspectives report said that ensuring a just transition, securing adequate financing and making radical choices are essential to achieve India’s net-zero goals. A significant hurdle is the returns gap between traditional oil and gas companies and green energy enterprises. “Despite investor enthusiasm and higher stock market valuations for green energy companies, oil and gas companies have consistently outperformed them by an average of 8.3 per cent in returns on capital employed over the past five years. Addressing this disparity is crucial for a fair and just transition and impacts the broader political economy of fossil fuel-dependent industries,” said the report.

According to the report, India rides the global energy transition wave, it navigates the demands of economic ascent. This should take the country to the upper-middle-income level by the mid-2030s, alongside an urban surge of more than 40 per cent."The quality of this growth hinges on addressing endemic pollution levels. IQAir data shows that 17 of the world’s 20 most-polluted cities are in India, with coal dominant in the energy mix at 48 per cent, according to Energy and Climate Scenarios," said the report.

 It added that to overcome air pollution and climate change threats, India needs to accelerate its energy transition and move beyond business-as-usual approaches.