India's oil demand will more than double to 10 million barrels per day by 2040, oil producers' cartel OPEC Secretary General Mohammad Sanusi Barkindo said on Monday as he saw the world's third largest energy consumer playing an important role in oil market stability.
"Its vibrant economy currently enjoys the fastest growth in the world with a rate of 7.5 percent in 2016. At one level, India represents an important source of rapidly growing oil demand that appears to now be the highest, at nearly 300,000 barrels per day - a rate that surpasses China," he said addressing the Petrotech conference in New Delhi.
The growth is being generated by the country's transition to modern fuels in households, as well as rising demand in the transportation sector and in the petrochemical industry. "This has provided a great incentive to the world's oil producers, OPEC Member Countries in particular, to ensure that India's future demand needs are met," he said.
Also, India is home to one of the most important single consumers of crude oil, Reliance Industries, which operates the world's largest oil refinery at Jamnagar in Gujarat with an annual processing capacity of about 1.2 million barrels per day.
"There is, therefore, no doubt that India has emerged as a global player on the energy scene. And as a large oil consumer, India also shares with us and other global oil producers another important goal – oil market stability. The flip side of this is, of course, oil price volatility," he said.
According to OPEC, global demand is forecast to increase by nearly 17 million barrels a day until 2040 – when it could reach around 110 million bpd. Emerging and developing economies in Asia are expected to make up roughly 70 percent of this growth, which is being spurred on by the region's population growth, a rapidly expanding middle class, urbanisation and industrialisation.
"India is projected to see its population grow by 317 million, surpassing that of China by 2030, and reaching 1.6 billion by 2040. This would correspond to around 18 percent of the world population, compared to 16 percent for China, during the same projection period in 2040," he said.
GDP growth in India and China are estimated at 6.9 percent and 4.9 percent per year, respectively, over the forecast period up to 2040.
"In particular, China ($41.3 trillion) and India ($31.6 trillion) will together contribute more than half of the total global economic growth between 2015 and 2040," he said.
"India will also see dramatic increases in its real GDP over the next 25 years. It is anticipated to surpass OECD Europe in 2034 and, by 2040, India's real GDP is estimated to be about the same size as OECD Americas," he said.
In India alone, oil demand is projected to rise to more than 10 million bpd by 2040 compared to 4.1 million bpd in 2015, he said.
"Such a substantial expansion in India and other fast growing economies in Asia will require supplies from all producing regions. Thankfully, OPEC Member Countries will play a crucial role in fuelling this dynamic growth. But for this to happen, continued investment in our Member Countries' energy industries is required," he said.