India, one of the world’s fastest-growing oil markets, has lagged behind major economies in Europe and Asia in electric vehicle adoption but sales are now growing and investment is growing. Investment in new car production and energy infrastructure is accelerating.
A faster-than-expected industry growth rate means India’s gasoline consumption will peak earlier than previously thought, some analysts and industry participants say, forcing companies to Leading oil companies must accelerate their plans to transition to alternative businesses, especially increasing petrochemical production.
“We have predicted that peak gasoline demand will be earlier around 2040-2045, but given the trends and the rate at which we are developing the ecosystem around electric vehicles, peak demand will be between the 2030s,” Debasish Mishra, Partners, Energy, Resources and Industry, Deloitte India told Reuters. He expects diesel demand to peak around the same time as gasoline.
A slowdown in fuel demand will become apparent around 2030 as EV technologies stabilize, compared with previous forecasts of the 2040s, an industry source at an India-based refinery said. told Reuters, adding that the heavy trucking sector will see changes a little later.
“Refineries have invested in petrochemical integration to cope with the potential loss of fuel demand,” the source said, speaking on condition of anonymity because he was not authorized to speak to the media.
Currently, about 90% of India’s petrochemical needs are met by China, he said, so a shift by Indian refineries to domestic chemical demand could dramatically change the dynamics. supply force.
India’s refineries are investing billions of dollars to increase petrochemical capacity. Indian Oil Corp., the country’s top refiner, is increasing petrochemical capacity at its Panipat refinery by 13% and building new plants affiliated with the Paradip and Gujarat refineries.
Reliance Industries Ltd, operator of the world’s largest oil refinery complex, plans to invest 750 billion rupees ($9.38 billion) to expand its chemicals business, while Essar Group plans to set up setting up a petrochemical complex worth Rs 400 billion in eastern India.
Nayara Energy expects 15-20 new integrated petrochemical plants to start operations over the next decade.
EV, TRUCK
China currently dominates global EV production, and the domestic adoption of new energy vehicles is also very advanced. The China Passenger Car Association expects sales of new energy cars, mainly electric vehicles, to reach 8.5 million units this year, or 36% of total new sales.
Despite the new momentum in India, the question for the country is whether it will be enough to finally shed its dependence on fossil fuels.
“Limited charging infrastructure, low domestic EV production, and high EV battery costs remain some of the key obstacles in maintaining strong EV consumption over the long term,” said Dylan Sim, analyst. oil market at FGE said.
India’s progress has been modest compared to global, however, electric vehicle registrations last year tripled to 1.01 million from 2021, mostly two- and three-wheelers.
While electric vehicles only account for 1% of the 3 million cars sold each year, New Delhi wants to increase this share to 30% by 2030 and has introduced a series of policies to achieve that goal, including reducing taxes for consumers.
India’s state refiners, which dominate fuel retailers, plan to set up EV charging facilities at more than 22,000 fuel stations and highways by 2024.
The private sector is also offering hope to EV bulls.
Blusmart, a ride-hailing service headquartered in Gurugram that owns a fleet of 3,000 electric vehicles, has seen rapid growth.
Co-founder Punit Goyal told Reuters it now offers 500,000 rides monthly, up from about 35,000 when it started in 2019.
Local automakers like Tata Motors and Mahindra & Mahindra have made big investments while foreign companies like Kia and BYD have announced premium models for the Indian market.
About 40% of India’s fuel needs are diesel, mainly used for trucks.
Chetan Maini, president of Sun Mobility, which provides electric mobility solutions, said that India’s smaller trucks, including tricycles, could soon be adopted in the transition. thanks to cost advantages for e-commerce and delivery companies.
His company currently has 80 battery exchange stations in Delhi for two- and three-wheelers and plans to set up 200 by March.
Maini said: “In 2030, a big opportunity will be in the trucking industry because the cost economy will be really effective.
First published date: January 27, 2023, 08:36 AM IST
