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India expects its fuel demand to continue growing and increase by 2.7% in the 2024-2025 fiscal year beginning on April 1, data from the petroleum ministry showed on Thursday.
Gasoline consumption in India is set to increase by 5.4% and demand for diesel – the top-selling fuel in the world’s third-largest crude oil importer – is expected to grow by 2.7% in 2024-2025, according to the government data.
Total fuel consumption in India, a proxy for oil demand, is forecast to increase to 238.954 million tons in 2024-2025, up from the revised estimate of 232.561 million tons for the 2023-2024 fiscal year.
India’s consumption of jet fuel and bitumen is also set to grow, by 8% and 3.4%, respectively, during the next fiscal year.
India’s fuel demand hit a seven-month high in December 2023, thanks to the festive season, with consumption rising by 6.2% compared to November and by 2.6% compared to December 2022.
Before the end of this decade, India is set to become the single biggest driver of global oil demand, replacing China, analysts and forecasters say.
India’s economy has grown at a robust pace over the past year. Meanwhile, growth in other major economies—including China—has sputtered. High GDP growth, industrialization, urbanization, and a rising number of middle class in India are all expected to shift the key oil demand growth driver from China onto India.
India’s economy is growing faster than all other major economies, and so is its demand for energy.
India will be the driver of oil demand growth through 2045, expected to add 6.6 million bpd to oil demand over the forecast period, OPEC said in its latest annual outlook, in which it raised significantly its long-term projections and now expects global oil demand at around 116 million bpd in 2045, up by 6 million bpd compared to the previous assessment.
By Charles Kennedy for Oilprice.com
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Charles is a writer for Oilprice.com