India’s oil and gas imports are expected to double by 2050 as overall energy demand grows while the dependence on coal reduces going forward. According to BP Energy Outlook 2050, the growth of energy consumption in the emerging economies will be led by India, “which is seen to be the largest source of demand growth out to 2050”.
The world’s third-largest oil importer, India, will be the biggest source of energy demand growth through 2050 in any scenario about government policies about the energy transition. However, India may not be as key a driver of global oil demand growth as previously thought, inferred the BP Energy Outlook 2020, in which the supermajor said that global oil demand may have already peaked last year as oil consumption may never recover to the pre-pandemic levels.
India’s oil consumption may peak as soon as 2025 at round 6 million barrels per day (bpd), compared to 5.1 million bpd demand in 2018, according to two out of three scenarios BP has examined in its outlook—Rapid and Net Zero.
In the third scenario, Business As Usual (BAU), BP assumes that government policies, technologies, and societal preferences will continue to evolve in a manner and speed seen in the recent past. Under this scenario, India’s oil demand growth still has a long way to run, with oil consumption reaching 9.7 million bpd in 2050.
In the Net Zero scenario, Indian oil demand slumps to just 2.4 million bpd in 2050, while the Rapid scenario – assuming a significant increase in carbon prices around the world – India’s oil demand in 2050 will be broadly flat compared to 2018, at 5.2 million bpd, BP estimates.
It is very likely that future oil demand, in India and globally, is some sort of a combination of the three scenarios BP has laid out. But it is also very likely that oil demand growth, in India and around the world, is going through a seismic shift amid the energy transition and government policies to support the economic recovery from the pandemic-driven recession.
India’s primary energy consumption is set to more than double by 2050 in all three scenarios, but the only fossil fuel growing in all scenarios is natural gas, underpinned by growing population and prosperity, BP said. In addition, renewable energy is set to grow strongly in all the scenarios, becoming the largest energy source in 2050. All in all, the strong growth in primary energy consumption in India will be primarily led by renewable energy and, to a lesser extent, natural gas, BP said.