Oil consumption in India to reach 250 million metric tons by 2020

December 9, 2011

According to the Society of Indian Automobile Manufacturers (SIAM), sales of passenger vehicles in the country nearly doubled from 2004-05 to 2010-2011. Sales of passenger cars exhibited the fastest growth, which rose from more than one million units in 2004-2005 to more than 2.5 million units in 2010-2011. Experts predict that by 2020, that figure will reach 5.5 million units, which will in turn lead to higher oil demand. The current domestic production capacity of crude oil in India is around 34 million metric tons, while current consumption is 140 million metric tons. The country imports almost 80% of its petroleum requirements. India’s Planning Commission forecasts that domestic oil consumption will reach 250 million metric tons by 2020.

Fuel efficiency standards proposed to moderate fuel consumption

An unrestrained demand growth and continued reliance on imported oil will have adverse effects on the country’s energy security and on the price of fuel. The government has exerted efforts to augment sources of oil, but experts agree that policies like fuel efficiency standards are needed to moderate rising demand. Fuel efficiency standards were recently introduced in China and are used in many developed countries. The standards are aimed at moderating the consumption of fuel, providing monetary savings for vehicle owners and reducing green house emissions. The Bureau of Energy Efficiency (BEE) has submitted a consultation document focusing on fuel efficiency of vehicles that proposes a labeling scheme that is similar to the ones that are already being used for appliances like refrigerators and air conditioners. The proposal is for the label to denote the efficiency level of the car through a STAR labeling scheme that will contain all the pertinent data regarding the vehicle’s fuel efficiency. The BEE believes that the proposed scheme will work because Indian consumers are very conscious of the mileage and operating costs of their vehicles. (December 9, 2011)

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