India's Petroleum Minister Dharmendra Pradhan expects the demand for crude oil in the country to rise in excess of 11 percent this year, thanks to "better monsoon rains" and growth in economic activity.
Last year, India recorded an increase of 11 percent in the consumption of oil, versus projections for a rate of 7-8 percent. This year should see a higher increase, Pradhan said at the London presentation of the latest round of bids for newly discovered small-scale oilfields. The estimated combined reserves in these fields are 625 million barrels of oil and gas. The bid round is part of government efforts to reduce India's dependence on oil imports by a tenth over the next six years.
In the second quarter of this year, which is first for India's financial year, oil product demand expanded at a rate of 7.8 percent on an annual basis. This was the fastest first-quarter demand increase for the last ten years, the Petroleum Ministry then noted. In absolute terms, the world's third-largest oil consumer to date used 48.5 million tons of oil products in the three months from April to June.
According to the International Energy Agency, India will top the list of the largest oil consumers in the world this year, surpassing China and the U.S. thanks to its drive to become the next major economic hothouse, after China shifted course to a more service-oriented economic model.
Large-scale infrastructure projects and a growing middle class will contribute to the increase in manufacturing activity stipulated in the Make in India strategy launched by Narendra Modi's government two years ago.
According to an Energy Aspects analyst Richard Mallinson, quoted by Bloomberg, oil consumption in India is likely to grow at a daily rate of 400,000 barrels this year and next, making it the fastest pace of consumption growth globally.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry. More