India will remain the third largest crude oil consumer in the world, since India is unlikely to overtake the crude consumption levels in US and China over the next decade, says India Ratings and Research (Ind-Ra).
As per the latest BP statistical review, India has emerged as the third largest consumer of crude oil, after US (19.39mbpd) and China (11.96mbpd) and displacing Japan (4.15mbpd) from the third position. Ind-Ra believes India will remain third, even if Indian consumption grows at a CAGR of 10 per cent (double the rate of crude consumption growth of 4.8 per cent over 2005-2015) in the next decade.
Globally, crude continues to be largest provider of primary energy. The overall primary energy consumption in India measured in million tonnes oil equivalent (mtoe) has grown by 5.9 per cent CAGR to 700mtoe over 2005-15.
Though India has moved to the third position, this growth presents a problem of energy security, as India continues to import bulk of its crude needs. With domestic gas production is also dwindling, the gas requirements have also been met from imported re-gasified liquefied natural gas.
The growth in crude oil consumption in India has been driven by the strong demand for the end product in the country, with demand growing by 11.2 per cent in FY16 with a strong growth recorded by petrol, diesel, LPG, and Naptha sales at 14.3 per cent, 7.5 per cent, 8.8 per cent and 22.5 per cent respectively.