Oil demand to touch new high in FY27 on rising use of key fuels, Pg12

Key Highlights:

• India's petroleum product consumption is projected to reach 250.8 million tonnes in FY27, a 2.8% increase over the revised FY26 estimate.
• The growth in consumption will be driven by petrol, aviation turbine fuel (ATF), liquefied petroleum gas (LPG), diesel, and naphtha.
• India's petroleum consumption has been rising annually, except during the COVID-19 pandemic.
• IEA projects India to lead global oil demand growth over the next ten years, surpassing China.

Detailed Insights:

• India's rising petroleum demand is attributed to growing energy-intensive industries, increasing vehicle sales, a rapidly expanding aviation sector, and rising consumption of petrochemicals.
• Despite having a refining capacity of 258 million tonnes per annum, India's stagnant domestic oil production necessitates higher oil imports to meet the rising demand.
• Diesel consumption is projected to reach 96.4 mt in FY27, while petrol consumption is expected to be 44.9 mt, reflecting growth in the transportation and industrial sectors.
• LPG consumption is projected to increase to 34.7 mt, and ATF consumption is expected to rise to 9.7 mt in FY27, indicating strong growth in India's civil aviation market.
• Naphtha consumption is projected to increase to 12.7 mt in FY27, driven by its use as a major petrochemical feedstock for manufacturing plastics and synthetic fibers.
• The International Energy Agency (IEA) forecasts India's oil use to increase from 5.5 mb/d in 2024 to 8 mb/d in 2035, driven by car ownership, demand for plastics and chemicals, aviation, and LPG use for cooking.

Key Concepts Involved:

• Petroleum Products: Refined fuels and products derived from crude oil, including petrol, diesel, LPG, and ATF.
• Refining Capacity: The total amount of crude oil that a country or refinery can process in a year.
• Oil Import Dependency: The extent to which a country relies on imports to meet its crude oil needs.