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India aims to be a refining hub in Asia as it is boosting refining capacity and expects to continue relying on fossil fuels until at least 2040, according to Indian Petroleum Minister Hardeep Singh Puri
“Our existing refineries will increase in terms of capacity and they will also become regional hubs in terms of providing to other countries,” the minister told Reuters on Tuesday.
India will drive up to 35% of global energy demand growth over the next 20 years, Puri said at the Gastech conference in Houston earlier this year.
“If you say that global demand is increasing by one percent, ours is increasing by three times that,” Puri said. “In the next two decades, 35% of the increase in global demand will come from India.”
India is set to overtake China soon to become the biggest driver of oil demand growth.
OPEC’s World Oil Outlook 2050 says that India, Asia outside China, Africa, and the Middle East will be the key sources of incremental demand in the coming years. Combined demand in these four regions is set to increase by 22 million barrels per day (bpd) between 2023 and 2050.
India alone will add 8 million bpd to its oil demand by 2050. China, for its part, will see its oil demand increase by 2.5 million bpd, according to OPEC.
In the near term, Indian refiners are on the lookout for funding to build new refineries, as they seek to expand their refining capacity to meet growing domestic demand for fuels amid higher-than-average economic growth and rising middle-class numbers.
For example, state-controlled refiner Bharat Petroleum Corporation Ltd (BPCL) is in talks with major local banks to secure a loan of about $3.8 billion which it will use to expand the capacity of one of its refineries.
Another state-owned refiner, Chennai Petroleum Corporation Limited, is reportedly in discussions with banks to obtain a loan of $3.33 billion (280 billion Indian rupees) that would help it build a refinery in the state of Tamil Nadu in southern India.
