India’s oil import dependency up at 88.1% in April-December as demand growth pips domestic output

India’s vigor needs are consistently growing, starring to accrued lipid imports. This is fuelled by factors similar increasing energy-intensive industries, accrued conveyance sales, a rapidly expanding aviation sector, increasing depletion of petrochemicals, and a rising population.

India’s reliance connected imported lipid has mostly accrued implicit the years, with the objection of FY21 erstwhile request was suppressed owed to the COVID-19 pandemic. India’s lipid import dependency was 87.8 per cent successful FY24, 87.4 per cent successful FY23, 85.5 per cent successful FY22, 84.4 per cent successful FY21, 85 per cent successful FY20, and 83.8 per cent successful FY19.

India’s dense reliance connected imported crude lipid makes its system susceptible to planetary lipid terms fluctuations. This besides impacts the country’s commercialized deficit, overseas speech reserves, the rupee’s speech rate, and inflation rate, among others.

Oil import dependency: What information shows

India’s crude lipid imports roseate to 179.3 cardinal tonnes successful April-December, from 173.7 cardinal tonnes successful the aforesaid play the erstwhile year. Meanwhile, home lipid accumulation declined somewhat to 21.6 cardinal tonnes from 22 cardinal tonnes.

Total home depletion of petroleum products successful April-December roseate 3.4 per cent year-on-year to 178.5 cardinal tonnes, with lone 21.2 cardinal tonnes of products coming from domestically produced crude oil, starring to a self-sufficiency level of conscionable 11.9 per cent, per the PPAC data.

The country’s gross lipid import measure for the archetypal 9 months of FY25 was $102.5 billion, an summation of astir 4 per cent year-on-year. Crude lipid imports apical the database of India’s merchandise imports.

Future outlook: Demand, imports acceptable to rise

Crude lipid depletion and imports are projected to summation further owed to accrued request for petroleum fuels and products. Consumption of petroleum products is projected to summation by 4.7 per cent successful FY26, reaching 252.93 cardinal tonnes, according to latest estimates by the PPAC. If these projections hold, India’s petroleum substance and merchandise depletion successful FY26 volition deed yet different record.

Unlike galore countries, India is seen arsenic a large maturation centre for lipid request fixed the aboriginal depletion imaginable and comparatively debased per-capita vigor request currently. In fact, India is among the fewer markets wherever refinery capableness is expected to grow substantially implicit the coming years. India presently has a refining capableness of astir 257 cardinal tonnes per annum.

In February 2024, Paris-based International Energy Agency (IEA) had said that India’s lipid request maturation was expected to overtake China’s by 2027, making the erstwhile the biggest operator of planetary lipid request maturation done the remainder of the decennary “underpinned by beardown economical and demographic growth”, notwithstanding the increasing electrical conveyance (EV) penetration, vigor efficiency, and rising biofuel consumption.

India’s petroleum depletion has been scaling caller heights with each passing year, with the objection of 2 years erstwhile request was deed due to the fact that of the pandemic. The revised estimation for the existent fiscal—241.68 cardinal tonnes—is slated to beryllium the highest-ever petroleum merchandise depletion level truthful far, but volition apt beryllium topped successful the adjacent fiscal. The existent grounds depletion level—234.26 cardinal tonnes—was achieved successful FY24.

India’s efforts to chopped reliance connected lipid imports

The Indian authorities aims to trim its reliance connected imported crude lipid but faces challenges owed to sluggish home lipid output amidst rising demand. In 2015, the authorities aimed to trim reliance connected lipid imports to 67 per cent by 2022. However, import dependency has lone increased.

The authorities has implemented respective policies to promote investments successful India’s lipid and state exploration and accumulation sector. It is besides promoting electrical mobility, biofuels, and different alternate fuels to trim lipid imports.

While determination has been an summation successful electrical mobility adoption and the blending of biofuels with accepted fuels, it is not capable to offset petroleum request growth.