Data: India's rising energy needs
India has risen to become one of the key engines for global oil demand and a dominant force in the market, a report by Bank of America Merill Lynch states
India matters hugely to the global economy. In a development thought unimaginable just a few years ago, India outpaced China last year in terms of economic growth (6.9% versus 6.7%), the first time ever.
What is more, the country also overtook China in terms of oil demand growth in absolute terms, at least during two quarters, and tracked it closely on a full year basis. As such, India turned out to be a solid rock for oil demand in 2016 at a time when other major oil consumers around the world struggled with political and economic upheaval and exhibited more volatile consumption patterns. The worst impact will likely be over by the end of the first quarter and we are only shaving 20,000 b/d off our 2017 average demand growth forecasts to 260,000 b/d, bringing it just a bit below the 2016 levels.
Growth has primarily been driven by LPG, gasoline, jet fuel and naphtha with diesel lagging, largely on slower industrial activity and heavy monsoon rains in the last couple of years. Residential LPG consumption in poorer households is rapidly expanding, up 11% YoY in 2016, as the government is boosting LPG penetration across the rural country at the expense of kerosene.
Looking further out, energy consumption is expected to increase by a factor of 2.4 between 2014 and 2040. Put differently, India will account for 10.8% of global energy demand by 2040 while the country stood at 6% in 2014. Interestingly, more than one in five tonnes of coal will be consumed by India in 2040, while India’s share only represented 10% in 2014. Most of the upcoming change will come from bioenergy, which includes biomass, biofuels and biogas. Share of bioenergy accounted for 24% of total primary energy consumption, which is expected to decrease at the expense of coal, oil, natural gas and nuclear.