India’s fuel demand growth seen shrinking to 1.5% by 2030 on clean energy drive

NEW DELHI: The party seems to be over for petrol and diesel in India, the world’s fastest-growing fuel market. The government’s clean energy drive is expected to reduce the country’s fuel demand growth rate to 1.5% from nearly 5% by fiscal 2030, creating redundancy in India’s projected refining capacity expansion worth an estimated 1.5 lakh crore.
But despite the shrinking fuel demand, India’s incremental oil demand is expected to rise by 1.8 million barrels/day to 7 million barrel/day by fiscal 2030 from 5 million barrels/day in fiscal 2020, driven by growth in naphtha and petrochemicals capacities, says a CRISIL Research impact analysis of the clean energy drive on the transport sector.
It shows the annual growth in consumption of diesel, the most-consumed fuel, dropping to 2.5% by 2030 after maintaining a growth rate of 4% till 2025. The fall in the growth rate in petrol sales will be sharper, halving to 1% by 2030 from 2% between 2022 and 2025.