Technicians work at an oil rig at an Oil and Natural Gas Corp plant in Gujarat, India. Reuters

India is expected to be the largest driver of global oil demand growth between 2023 and 2030, narrowly taking the lead from top importer China, the International Energy Agency (IEA) said on Wednesday.

The world’s third-largest oil importer and consumer is on track to post an oil demand increase of almost 1.2 million barrels per day (bpd) between 2023 and 2030, accounting for more than one-third of the projected 3.2 million bpd of global increases in the period, the IEA said in a report released at the India Energy Week in Goa.

The agency forecast India’s demand would reach 6.6 million bpd in 2030, up from 5.5 million bpd in 2023.

“India will become the largest source of global oil demand growth between now and 2030, while growth in developed economies and China initially slows and then subsequently goes into reverse in our outlook,” it added.

The single largest basis of India’s oil consumption will be diesel fuel, accounting for almost half of the rise in the nation’s demand and more than one-sixth of total global oil demand growth through to 2030, the IEA said.

Jet fuel is poised to grow 5.9 per cent annually on average but this will be from a low base compared with other countries, it added.

Meanwhile India’s Prime Minister Narendra Modi has projected that the country’s energy demand will double by 2045.

Inaugurating the “India Energy Week”, Modi said India’s consumption of oil per day will soar from 19 million barrels to 38 million barrels by 2045.

“India currently ranks as the world’s third-largest energy consumer, oil consumer, and liquefied petroleum gas consumer. Additionally, it stands as the fourth largest importer of liquefied natural gas, refiner, and automobile market globally. Presently, India is witnessing record-breaking sales in both two-wheelers and four-wheelers, alongside a growing demand for electric vehicles,” Modi added.

Consequently, India is offering investment opportunities to the tune of $67 billion, primarily for energy-producing countries spread all over the world.

India has announced an infrastructure investment of Rs11 trillion ($1.32 billion) in its annual budget presented to Parliament on Feb.1. “A large part of this will go to the energy sector,” Modi said.

By increasing the blending of ethanol in petrol eight-fold in a decade, a reduction in carbon emissions of 42 million metric tonnes has been achieved, the Prime Minister stated.

“We are working towards achieving a target of blending 20 per cent ethanol in petrol by 2025.” At present, the comparative figure is 12 per cent.

The Indian Minister for Petroleum and Natural Gas, Hardeep Singh Puri, said that “India, despite having no large oil reserves of its own, has managed to successfully develop a large oil industry by strategic planning and investments in the refining sector.”

In the last fiscal year, crude oil was India’s biggest import item, while petroleum products made up the largest share of exports, he noted.

India Energy Week is the country’s largest and only all-encompassing energy exhibition and conference. It is now in its second year. Seventeen energy ministers, 35,000 delegates, and more than 900 exhibitors are attending this year’s event.

“In the case of India, compared with China or other parts of the world, the Indian economy still continues to need more transport fuels so we expect India will continue to grow in transportation fuels. So that’s something different from countries like China,” Keisuke Sadamori, the IEA’s director of energy markets and security, said on the sidelines of the conference.

Still, the electrification of India’s vehicle fleet will lead to a more muted 0.7 per cent annual growth average through 2030 for gasoline, the IEA said. New electric vehicles and energy efficiency improvements in India will avoid 480,000 bpd of extra oil demand from now to 2030, it added.

To meet this demand, India is expected to add 1 million bpd of new refining capacity over the seven-year period and this will increase its crude imports further to 5.8 million bpd by 2030, the IEA said.

“India is moving to the right path in terms of adding large additional refining capacities,” Prasad Panicker, chairman of Indian refiner Nayara Energy said at the conference.

He added that Indian gasoline demand will not peak for “at least the next 20-25 years”.

G Krishnakumar, the chairman of state run refiner Bharat Petroleum Corp, said that petrochemical demand for the company will also be a factor in India’s oil consumption increase, as demand growth for petrochemicals is “directly proportional to the gross domestic product of the country.”