New Delhi: India’s oil demand will rise more than that of any other country through 2050, powered by a fast-growing economy, and will account for over 12 percent of the global energy market, BP chief economist Spencer Dale said Monday. India, the world’s third-largest oil importer and consumer and the fourth-largest LNG importer, will see its oil demand rise from 5.4 million barrels per day (bpd) to 9.1 million bpd by 2050, while natural gas consumption will more than double to 153 billion cubic metres from 63 bcm.
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“At a conservative 5 percent economic growth rate per year between 2023 to 2050—double the rate of growth of the global economy—the country's primary energy consumption grows strong. By 2050, India will account for 12 percent of the world's demand, up from 7 percent in 2023,” Dale said.
“When we look ahead, India is the fastest-growing energy market in the world,” he said unveiling BP’s Energy Outlook 2025. “So when we think about what's driving global energy, India is at the heart of that process.”
The BP Outlook presents projections under two scenarios—‘Current Trajectory’ and ‘Below 2-Degree’, which aligns with the Paris Agreement’s goal of limiting global warming to below 2 degrees Celsius. “Energy demand increases in all scenarios driven by robust economic growth and rising prosperity,” Dale said.
The Outlook projects renewable energy to grow strongly, driven by solar and wind, but notes that coal will remain dominant. “In current trajectory, coal remains India's largest source of energy, with its share in the energy mix staying above 40 percent in 2050. However, in Below 2-Degrees, coal's share drops sharply to 16 percent.”
India’s consumption of natural gas increases in both scenarios, growing on average by 1–3 percent per year to 2050. India’s oil demand would make up 10 percent of global oil consumption by then.
Renewable energy becomes the largest source of primary energy in 2050 in the Below 2-Degrees scenario and the second largest in the Current Trajectory scenario.
Electricity is expected to play an increasingly important role in India’s energy needs. “In 2023 around 20 percent of energy was consumed in the form of electricity. By 2050, this grows to over 30 percent in Current Trajectory and to below 50 percent in Below 2-Degrees,” Dale said.
Comparing growth trends, he noted that while China remains one of the fastest-growing major economies, India is growing more quickly.
“India is one of the fastest growing energy markets in the world. Its demand for energy is growing more quickly than anywhere else, and it is going to need more of all types of energy,” he said, adding that while the share of renewable sources such as solar and wind will grow, fossil fuels will continue to stay.
On India’s target of installing 500 gigawatts of non-fossil electricity capacity by 2030, Dale said, “In our Current Trajectory, it (capacity) is just a little bit shy of that, but it meets it within the year or two after that.” He described India’s progress toward its 2030 goals as “quite remarkable.”
On the geopolitical front and the increasing trend of weaponisation of energy, Dale said that “increased geopolitical fragmentation will lead to greater energy differentiation and how countries react will vary.”
“For countries like India which are heavily reliant on imports to meet its energy needs, the focus would be on reducing imports and increasing domestic production,” he added.
Asked about peak demand, Dale said, “India's oil demand continues to grow all the way out to 2050... natural gas demand also increases substantially, almost doubling by 2050.”
In a world seeking rapid and deep decarbonisation, he noted that global oil and natural gas demand would need to fall. “In India, oil continues to grow (in such a scenario) through the early part of the 2030s and it plateaus around six and a half million barrels a day and then starts to decline,” he said, adding that natural gas demand also continues to grow through this decade before tapering off.
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He cautioned that this was “a sort of very hypothetical scenario” for a world wanting to decarbonise quickly.
“India's import dependence remains pretty high in both of these scenarios,” Dale said, explaining that although domestic production grows, “it doesn't grow sufficiently quickly to meet the growth in demand.”