Growth in consumption of petroleum products, petrol, diesel, kerosene and liquefied petroleum gas has been lower than anticipated by the government during the last five years amid record prices for oil, as well as increased use of natural gas.
Despite the economy logging over 7% growth through 2007, actual consumption of petroleum products during the period was 549.3 million tonnes (mt), compared with government estimates of 574.1 mt, according to the working group report on petroleum and natural gas for the 11th Plan, which will run through 2012. Said Arvind Mahajan, executive director at accounting firm KPMG: “It is a positive sign...however, much needs to be done on the country’s energy-management front.”
One of the central reasons for the growing use of natural gas stems from expanding infrastructure for import of liquefied natural gas (LNG), following the commissioning of the Dahej regasification terminal. Better roads, which often mean better fuel economy, usage of compressed natural gas in cities and increased electrification of railways have helped as well. The declining trend in consumption of petroleum products is likely to continue with huge natural gas finds on the east coast and the entry of multiple players for importing LNG.
Meanwhile, despite growing environmental concerns, India is likely to remain heavily dependent on coal for about half of its primary commercial energy requirements with the other half dominated by oil and gas. India’s per capita energy consumption is still much lower than that of the world’s or, say, China’s. “As compared with the world’s per capita energy consumption of 1,767kg of oil equivalent, India’s is only 540kg. China’s per capita consumption is 1,242kg,” noted Mahajan.