India's overall fuel demand will rise by an average of 4.7 percent a year through the fiscal year 2025 because of improving demand for gasoil as the country's road transport network improves, the Chief Executive Officer for Nayara Energy B. Anand said on Tuesday.
Chief executive B. Anand said he expects India's fuel demand to grow 4.7% a year to 5.5 million barrels per day (bpd) through fiscal year 2025, and then 4% per year to 6.6 million bpd through 2030.
Demand for gasoil will rise by an average 5.3% per year through the 2025 fiscal year and by an average 4.5% through 2030, he told the Asia Pacific Petroleum Conference in Singapore.
India would continue to rely mainly on road transport to move freight around the country, while the number of passenger cars would steadily increase in coming years with rising vehicle ownership, Anand said.
Gasoline and gasoil will continue to benefit from rising car sales and a stronger manufacturing industry, but faster than expected penetration of electric vehicles could pose a risk to demand growth, he added.
While the share of renewables, including solar, wind and natural gas, was likely to increase in the next 10 years, absolute oil demand would still rise strongly over the next decade, he said.
Nayara, which operates a 400,000-bpd refinery in western India, is capable of producing new low-sulphur specifications for marine fuels starting in 2020, Anand said.
The refiner, which procures 85% of its crude requirement from international markets, usually looks for so-called heavy crude oil grades from Europe, West Africa, Latin America and also Canada.
Nayara, however, hasn't yet sourced any of its crude oil from the United States, Anand said, "For us, it has to be the economics that has to be right."
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