India emerging as driving force for global oil demand growth: S&P Global | Mint

New Delhi: At a time when demand for oil across several large economies is slackening, India is turning into a driving force for global oil demand growth, backed by favourable demographics and economic acceleration, besides riding the global energy transition wave, according to S&P Global Commodity Insights.

Addressing the media on Wednesday, Pulkit Agarwal, head of India content (Cross Commodities), S&P Global Commodity Insights, said, “For India, oil demand continues to grow helped by favourable demographics and economic growth. India is quickly assuming a prominent place in the global oil demand growth order, while the base is still small to have an oversized implication on the global markets. India’s choice of oil sources continues to evolve, as India’s pivot to Russia continues largely unhindered in the fourth year of their meaningful initiation.”

India’s petroleum product consumption in FY26 is seen hitting a new record for the third consecutive year. According to data from the Petroleum Planning and Analysis Cell (PPAC), India’s petroleum product consumption is projected to hit an all-time high of 252.9 million tonnes in the ongoing fiscal. This is 4.65% higher than the 241.8 million tonnes projected for FY25.

Speaking on the energy transition journey as India aims to achieve net zero carbon emission by 2070, Gauri Jauhar, executive director, energy transition & cleantech consulting, S&P Global Commodity Insights, said: “India is riding the global energy transition wave, while navigating the energy demand of economic ascent, an urban surge and contending with high pollution levels.”

She, however, noted that with the persistent presence of coal, along with the renewable energy capacity addition, representing India’s resource abundance, there is a natural fossil fuel imprint led by coal in power and oil and gas in other core sectors.

S&P has come up with three different global scenarios which show varying speeds of energy transition. In base case, fossil fuels remain foundational, with only a slight decline by 2050 as renewables rise. Further, in an accelerated greening scenario, share of fossil fuels is expected to decline to 33% by 2050 as renewables in the primary energy mix approach close to 30%. In the third scenario, named—’Discord scenario’—wherein the challenges are expected in the global front, fossil fuels are likely to remain at 77% in the primary energy mix by 2050, with coal supplying just over 50% of the primary energy mix in 2050.

Jauhar said: “Facing the energy trilemma requires the India energy system to solve for energy accessibility, affordability, and security while transitioning.  Energy security considerations run through oil, gas, and coal with India importing around 87% of oil, around 50% of gas, and around 26% of coal in 2024.”

She added that achieving net zero, energy transition targets across multiple technology options will require connecting the dots of policy, regulatory and corporate action with a push for greater consistency.