India's petrochemicals demand is expected to jump ten times by 2050, the president of India's Chemicals and Petrochemicals Manufacturers' Association (CPMA) said at the CPMA - Argus Petrochemical Online Forum on Wednesday.
According to CPMA president Kamal Nanavaty, India's demand for petrochemical products will double every nine years at an annual growth rate of 8 percent. The country's demand for petrochemicals has been growing faster than the economy in recent years, and will rise more than GDP this year, too, Nanavaty said at the CPMA - Argus forum.
Indian petrochemical manufacturers could benefit from the surge in demand by co-locating petrochemical production facilities together with refineries, the Indian executive said. The petrochemical-refinery clusters would allow petrochemical producers to cut capital expenditure (capex) by up to 30 percent and operating costs by up to 20 percent.
After a COVID-induced slump, India's petrochemical demand is expected to return to pre-pandemic levels during the current fiscal year to March 2022, CPMA's secretary general Mahinder Singh told ICIS last month.
However, higher fuel prices in India lately have increased transportation costs from manufacturers to downstream firms, the petrochemical expert said.
Petrochemicals will be the key pillar of oil demand growth globally, both in the near and the long term, the International Energy Agency (IEA) said in its Oil 2021 annual report in March with forecasts through 2026.
While growth in road transport fuel demand is set to slow to below 0.5 percent annually after 2023, sectors such as petrochemicals will boost overall oil demand, the IEA said.
Despite the energy transition push in road transportation and electricity generation, some sectors - such as aviation, shipping, and petrochemicals - will continue to rely on oil for some time, the agency noted.
The petrochemical industry will remain a pillar of growth to 2026, as ethane, LPG, and naphtha together are set to account for 70 percent of the projected increase in oil product demand, according to the IEA.
By Tsvetana Paraskova for Oilprice.com
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