India will surpass China to become the world’s largest energy growth driver by 2030, India’s Oil Minister Dharmendra Pradhan said at a conference on Friday.
“We are on our way to become the world’s largest energy consumer,” the minister said, noting that India plans to use a combination of conventional fuel and sustainable fuels to create a “balanced energy mix.”
India will also explore the use of other sustainable sources of energy, such as hydrogen, Pradhan said.
The energy and steel sectors will play important roles in driving India on the path of becoming a US$5-trillion economy, the minister added on Twitter.
India aims to move to a gas-based economy and looks to invest around US$100 billion in energy infrastructure, including renewables, he said.
Economic and energy demand growth in India—which relies on oil imports for more than 80 percent of its oil consumption—and China are the two key drivers of the demand outlook for oil and consequently, for oil prices.
In recent months, India has seen its oil demand growth faltering amid an economic growth slowdown that has now continued for sixth consecutive quarters. If India’s economic growth picks up in the coming quarters amid brighter economic climate around the world, India’s oil demand growth would also pick up pace and increase overall global demand growth.
Last year, India’s oil consumption grew by 5.3 percent year on year and surpassed 5 million barrels per day (bpd), according to the BP Statistical Review 2019.
In BP’s Energy Outlook from this year with projections until 2040, India is expected to account for more than a quarter of the net global primary energy demand growth between 2017 and 2040.
“Robust growth in prosperity and population size drives a massive increase in India’s primary energy consumption, which expands by 1.2 billion tonnes of oil equivalent or 156% by 2040, making India by far the largest source of energy demand growth in the outlook,” BP said in its report.
By Tsvetana Paraskova for Oilprice.com
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While their populations are virtually comparable, China’s estimated GDP in 2019 was $27.5 trillion based on purchasing power parity (PPP) compared with India’s $9.9 trillion. By 2030 China’s projected GDP could reach $44.28 trillion compared with India’s $15.84 trillion both based on (PPP). In other words, China’s GDP in 2019 was 2.8 times bigger than India and is also projected to be almost 3.0 times bigger in 2030 as well.
Moreover, China’s total primary energy consumption in 2019 was estimated at 3414.26 million tonnes oil equivalent (mtoe) compared with 873.1 mtoe for India. By 2030, China’s primary energy is projected to reach 5019 mtoe compared with India’s 1644.5 mtoe.
In 2019 China consumed an estimated 14.24 million barrels a day (mbd) of oil compared with 5.46 mbd for India. By 2030 China is projected to consume 21.79 mbd compared with India’s 8.68 mbd.
By 2040 China is projected to account for 60% of global growth in primary energy consumption compared with 22% for India.
Dr Mamdouh G Salameh
International Oil Economist
Visiting Professor of Energy Economics at ESCP Europe Business School, London