Not Really A Good News: India’s Oil Demand To Grow by 6 Million Barrels by 2040

If we go by the international agencies’ estimates, then India’s oil demand would grow manifold during next 25 years and it will reach to 9.8 million barrels per day by 2040 from 3.8 million per day as existed in 2014. As per International Energy Agency’s estimates India’s demand will raise the most for any country and would grow by whooping 6 million barrels per day.

As per a written reply by Minister of State (I/C) for Petroleum & Natural Gas, Dharmendra Pradhan quoting World Energy Outlook-2015, expected availability of international Liquefied Natural Gas at markedly lower prices over the medium term, there is scope for gas demand to rebound and, recover to 68 bcm by 2020, before rising to almost 175 bcm in 2040.

As demand is slated to grow in the coming years, the government has taken various initiatives to increase the oil and gas production that includes approving the Marginal Field Policy, linking the transparent new gas pricing formula to the global market, reassessing the hydrocarbon potential in India’s sedimentary basins, appraising about 1.5 million sq. km. of un-appraised basins and setting up of National Data Repository. “Further, the Government is encouraging Foreign Direct Investment (FDI) to supplement domestic investment and technological capabilities in the petroleum sector. The present FDI policy for oil and gas sector allows 100% automatic route for exploration and production subject to the existing sectoral policy and regulatory framework in this sector,” the Minister quoted.

Just to give country the much needed energy security, government is also setting up the strategic crude oil reserves storage capacity. In fact as per the recommendation of Planning Commission in 2006, to maintain reserve equivalent to 90 days of oil imports, Government through Indian Strategic Petroleum Reserve Limited (ISPRL) is setting up strategic crude oil reserves with storage capacity of 5.33 Million Metric Tonnes (MMT) at three locations viz. Visakhapatnam(1.33 MMT), Mangalore(1.5 MMT)  and Padur (2.5 MMT). “Also, Detailed Project Reports have been prepared for establishing additional crude oil reserves of 12.5 MMT at Chandikhol (3.75 MMT),  Padur(2.5 MMT), Rajkot (2.5 MMT) and Bikaner (3.75 MMT),” Pradhan added.