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India’s oil consumption increased by 3.7 million tonnes (4.8 per cent) in the first four months of 2024 compared with the same period in 2023, according to data from the government’s Petroleum Planning and Analysis Cell.
Increased domestic consumption was equivalent to an extra 220,000 barrels per day (bpd), only slightly slower than growth of 235,000 bpd in the first four months of 2023 and 241,000 bpd in the same period in 2022.
Growth was broadly in line with the Opec secretariat’s forecast for a full-year average increase of 230,000 bpd. (“Monthly oil market report”, Opec, May 14)
India is becoming one of the most important drivers of global petroleum consumption and expected to overtake China as the single most important source of growth by 2030.
However, the switchover is still in the future. Opec predicts India will account for one-tenth of global growth this year, the second-highest share of any country, but still well behind almost one-third coming from China.
Two-thirds of India’s petroleum consumption is attributable to just three products - diesel (39 per cent), gasoline (16 per cent) and liquefied petroleum gas (LPG) (13 per cent).
Much smaller shares are attributable to petroleum coke (9 per cent), naphtha (6 per cent), bitumen (4 per cent), jet fuel (4 per cent) and other products.
Diesel is mainly used by freight hauliers, manufacturers and mines, with small quantities in agriculture and power generation, and consumption has risen at an average annual rate of a little under 3 per cent over the last decade.
The fastest growth has come from gasoline, rising at an average rate of 8 per cent per year, as household incomes have driven a rapid increase in motorcycle and car ownership.
The number of registered motorcycles and passenger cars more than doubled in the decade up to 2020, according to the most recent available data from the Ministry of Road Transport and Highways.
The second-fastest growth has come from LPG, increasing more than 6 per cent per year, as more households turn to bottled gas to replace kerosene for cooking.
Households account for almost 90 per cent of the country’s LPG consumption and it has almost entirely replaced kerosene in the last 20 years.
Growth led by gasoline and LPG rather than diesel is consistent with other data showing the country’s economic expansion is being driven primarily by consumption rather than industrial deepening. -Reuters