‘India to become main driver of incremental oil use by 2030’

India's petroleum consumption is rapidly increasing, set to surpass China as the primary driver of oil consumption by 2030.

India’s petroleum consumption climbed to a new record last year and the country is on course to overtake China as the primary driver of incremental oil consumption before 2030.

Urbanisation, industrialisation and the growth of the middle class are driving a rapid increase in consumption of petroleum products for heating, lighting, cooking, transportation and petrochemicals.

China’s demand for transportation is increasingly satisfied by electric vehicles, but India’s is still mostly met by internal combustion engines owing to their greater affordability. While China’s oil consumption is expected to peak before the end of the decade and start to fall, India’s will continue increasing throughout the 2030s.

India is already the second-most important driver of incremental consumption in the world and is on course to take the top spot before 2030.

The country’s economic growth will become a primary driver of global consumption and prices and a focus for analysis and forecasts.

India’s petroleum consumption increased to 231 million tonnes in 2023, up from 219 million tonnes in 2022, according to the Ministry of Petroleum and Natural Gas.

Consumption was severely affected by the coronavirus pandemic but has mostly recovered. It was only 6 million tonnes below the pre-pandemic trend for 2015-2019 last year. India and China both experienced compound annual growth in consumption of around 3.5% between 2012 and 2022, compared with just 0.5% per year in the rest of the world (“Statistical review of world energy”, Energy Institute, 2023).