New Delhi: Global energy consultancy Wood Mackenzie forecast that the country will this year go past China to become the second largest oil demand growth center in the world, only behind the United States. The rise in demand has been driven by the increasing use of petrol, diesel, and liquefied petroleum gas (LPG) in India, the firm said on Tuesday. Growing mobility needs, rising income levels, and a growing middle class have also contributed to the demand.
“India’s demand growth recovered strongly in 2018, overcoming the aftermath of the goods and services tax (GST) and demonetisation, and contributing to 14 percent of the global demand growth or 245,000 barrel per day”
“India’s demand growth recovered strongly in 2018, overcoming the aftermath of the goods and services tax (GST) and demonetisation, and contributing to 14 percent of the global demand growth or 245,000 barrel per day. We forecast oil demand to grow at the same level in 2019,” said WoodMac.
Demand picked up in 2018
India’s demand for fuel grew to 210 million tonnes (MT), or 4.47 percent in the calendar year 2018, as compared to 201 MT used in the calendar year 2017, according to media reports.
WoodMac has estimated demand for diesel will grow to 1,12,000 barrels per day, or 6.4 percent, compared to 93,000 barrels per day in 2018.
The removal of interstate taxes has seen an increased demand for heavy and medium-duty trucks, and increased travel activity due to general elections in May have contributed to the demand for diesel.
Growing mobility needs, rising income
The demand for LPG would remain healthy this at 40,000 barrels a day, or 5 percent, less than the 56,000 barrels per day growth achieved in 2018, the firm said.
“The number of new household LPG customers continued to surge, driven by the Ujjwala scheme to promote clean cooking fuel in rural areas. That said, there is a large untapped market, as about 50 million households remain deprived of LPG,” WoodMac said.
The firm added that electric two-wheelers are set to take over the personal electric mobility transport sector.