India’s oil import is unlikely to come down in the near future and the demand for liquid fuel will increase to 10 million barrels per day by 2040 from the current 4 million bpd, according to Spencer Dale, group chief economist, BP Plc. While the domestic production of oil is not going up significantly, more and more Indian families will be buying their first cars driving up oil demand, he said. However, the extent of import will also depend on use of gas in transportation and households. The country’s gas demand is set to triple in the next 25 years, according to Dale. India plans to decrease its fuel import dependence by 10% by 2022. According to Dale, though there will a rapid increase in electric cars, it will not be the game-changer in affecting oil demand. However, if two- and three-wheelers can be run on alternative energy, it may have a much bigger impact on oil demand. Though the government has not come out with a policy for electric vehicles, an action plan for zero emission mobility does not rule out other forms of energy being used for transportation.
The British oil giant also sees India to be as leader in energy demand by 2030, given its strong and sustained economic growth coupled with more people getting access to energy such as electricity. The Indian government plans to provide electricity to 4 crore households without access at present by 2020.