India's oil demand will rise more than that of any other country through 2050 on the back of its fast-growing economy, and will account for over 12 per cent of the global energy market, BP chief economist Spencer Dale said on Monday.
India is the world's third-largest oil importing and consuming nation and the fourth-largest LNG importer. Its oil demand is projected to grow 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 meters (bcm) from 63 bcm.
At a conservative 5 per cent economic growth rate per year between 2023 to 2050, double the rate of growth of the global economy, the country's primary energy consumption will grow strongly. By 2050, India will account for 12 per cent of the world's demand, up from 7 per cent in 2023, said Dale, while unveiling BP's Energy Outlook 2025.
"When we look ahead, India is the fastest-growing energy market in the world. So when we think about what's driving global energy, India is at the heart of that process," he said.
The outlook gives projections under two scenarios, “Current Trajectory” and “Below 2-Degree” that depicts an energy future aligned 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 renewables growing strongly, driven by solar and wind, but coal remaining dominant. "In current trajectory, coal remains India's largest source of energy, with its share in the energy mix staying above 40 per cent in 2050. However, in Below 2-Degrees, coal's share drops sharply to 16 per cent," he said.
India's consumption of natural gas increases in both scenarios, growing on average by 1-3 per cent per year to 2050. India's oil demand would make up for 10 per cent of global oil consumption.
Renewable energy, on the other hand, will become the largest source of primary energy in 2050 in Below 2-Degrees and the second largest in Current Trajectory.
While in 2023 around 20 per cent of energy was consumed in the form of electricity, this will grow to over 30 per cent in Current Trajectory and to below 50 per cent in Below 2-Degrees by 2050.
"India’s demand for energy is growing more quickly than anywhere else, and it is going to need more of all types of energy," said Dale.
Also read: India's energy demand jumped 41% due to 2023 heatwaves
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