India Petroleum Oil & Coal Imports to Rise with Growing Energy Demand

As per India Import Data, India could witness the biggest increase in the energy demand all across the globe over the next 20 years with the potential for oil consumption increasing as high as 4 million b/d to 8.7 million b/d by 2040.

This sharp surge in energy demand predicted over the next decade will make the country to import more petroleum oil and coal as renewable energy on its own may not be able to cater the entire incremental demand.

India Export Data shows petroleum oil and coal together accounts for 70% of India’s energy basket in which petroleum liquids share 25% and coal share 45%. However, the imports of petroleum liquids in India reduced in April, May, and June in period of Jan – Jun 2021. The top import sources of petroleum oil are South Korea, United Arab Emirates, Singapore, Qatar, Saudi Arabia, United States, Iran, Oman, Taiwan and Netherlands.

As per the India Export Data provider the coal imports of the country fluctuated in first 6 months of 2021. Except in the month of March all other demand recorded in value of shipments. The top import sources of coal are Australia, Indonesia, South Africa, United States, Russia, Canada, Mozambique, Kazakhstan, New Zealand, and Austria.

The main challenge for the country is the fact that 70% of its Co2 emissions come from burning coal, mainly in the power sector. India’s annual electricity demand is anticipated to grow on an average b 4.4% over 2020-2030.

The coal power capacity is projected to grow from present 203 GW to 220-230 GW by 2025. Industrial coal demand is expected to remain firm as power, cement and steel companies are dependent on coal with a lack of affordable options.

The country will face major challenge to reduce emissions by lowering dependency on coal and petroleum liquids imports. Also, the country needs to import more coal and petroleum products to meet growing demand.

The growing energy demand of the country will make it more reliant on fossil fuel imports as its domestic oil and gas production has been stagnant for years despite government policies to promote petroleum exploration and production and renewable energy.

The country will be the third biggest energy consumer all across the globe after the United States and China by the year 2030. India is the world’s second biggest net oil importer after China currently imports about 76% of its crude oil requirements.

The rising oil demand could double the country’s oil imports bill to about $181 billion by 2030 and approximately triple it to $255 billion by 2040 as compared to 2019.

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