'India will become the biggest engine of global oil demand in the next decade', claims rating agency Moody's

China has driven global demand for oil in the previous decade but will be replaced by India in the next ten years as far as growth in oil demand goes. Both China and India are the second and third largest oil consumers in the world, but differ in the growth in demand in the two nations. Rating agency Moody's provided this data in their report recently.

According to Moody's, demand growth and import dependence will be higher in India in the next decade. Demand in India will grow faster than in China, as China's economic growth is slowing down. India's government oil marketing companies have been investing heavily in increasing their refining capacity for the past few years. These include Bharat Petroleum Corporation Limited (BPCL), Hindustan Petroleum Corporation Limited (HPCL), and Indian Oil Corporation (IOC).

On the demand side, Moody's has indicated that demand for natural gas in India will rise a shade faster compared to China. India's goal is to raise the proportion of natural gas in energy consumption from 6% to 15% by 2030. Gas has industrial applications in sectors such as the production of fertilizers and petrochemicals. Moreover, gas consumption on a domestic and transportation level is on the rise in towns and cities. Because of all these factors, the demand for natural gas in India can rise by 4-7% annually.

The report says that the use of CNG (compressed natural gas) and PNG (piped natural gas) has increased rapidly in vehicles and homes in cities. But there are some challenges to further expansion in this, such as lack of gas pipeline connectivity across the country and price problems. Because alternatives like renewable energy are sometimes cheaper than gas. Even though the demand for gas is increasing in India, to realise its full potential, it is important to focus on infrastructure and affordable prices.