India’s rapid uptake of electric vehicles prompts rethinking of long-term fuel needs |
NEW DELHI, 27 January (Reuters) – The rapid adoption of electric vehicles in India’s emerging market has prompted a rethink about the country’s long-term fuel needs as refiners in Asia’s third-largest economy accelerate their shift away from oil production.
India, one of the world’s fastest-growing oil markets, is on the uptake of EVs Europe and lagging behind its major Asian economic peers, but sales are now growing and investment in new car production and energy infrastructure is accelerating.
According to some analysts and industry participants, India’s industry is growing faster than expected gasoline consumption will peak sooner than previously thought, prompting some analysts and industry participants to accelerate plans to shift to alternative business lines, particularly as petrochemical production has increased.
Debasish Mishra, Energy Specialist, Partner, said, “We previously expected peak demand for gasoline to be in 2040-2045, but given the trend and speed at which we are developing the ecosystem around EVs, peak demand will be in the mid-2030s.” , resources and industry, Deloitte India told Reuters. He expects diesel demand to peak at the same time as gasoline.
An industry source at an India-based oil refinery told Reuters that a slowdown in fuel demand by 2030 is all but certain as EV technologies stabilize.
“Refineries are already investing in petrochemical integration to combat the potential loss in fuel demand,” said the source, who spoke on condition of anonymity because he was not authorized to speak to the media.
About 90% of India’s petrochemical demand is currently met by China, so a shift by Indian refiners to domestic chemical needs could dramatically change supply dynamics, he said.
Indian refineries billions to boost petrochemical capacity dollars they invest. Indian Oil Corp ( IOC.NS ), the country’s top refiner, is increasing petrochemical capacity at its Panipat refinery by 13% and building new plants linked to its Paradip and Gujarat refineries.
Reliance Industries Ltd ( RELI.NS ), the operator of the world’s largest processing complex, will buy 750 to expand its chemical business billion Rupees (9.38 billion dollars) plans to invest, while Essar Group plans to invest 400 in eastern India billion plans to build a petrochemical complex.
Nayara Energy (ESRO.M3) over the next decade 15-20 A new integrated petrochemical plant is expected to be commissioned.
Reuters graphics
EV, trucks
China currently dominates global EV production, and local adoption of new energy vehicles is well developed. The China Passenger Car Association expects sales of new energy vehicles, mainly electric vehicles, to reach 8.5 million units this year, or 36% of all new sales.
Despite the new momentum in India, the question for the country is whether it will be enough to shake its dependence on fossil fuels.
“Limited charging infrastructure, low domestic EV production and high EV battery costs remain some of the key barriers to sustaining strong EV adoption in the long term,” said Dylan Sim, oil market analyst at FGE.
India’s progress is modest by global comparisons, but the number of electric vehicles registered last year tripled to 1.01 million by 2021, most of them two- and three-wheelers.
While electric cars make up just 1% of the 3 million vehicles sold annually, New Delhi wants to increase that to 30% by 2030, and for consumers tax has implemented a number of policies to get there, including concessions.
India’s state-owned refiners, which dominate fuel retail, plan to set up more than 22,000 gas stations and highway charging stations by 2024.
The private sector is also giving hope to EV bulls.
Gurugram-headquartered Blusmart ride-hailing service with 3,000 EVs has grown rapidly.
Its co-founder Punit Goyal told Reuters that it has grown from about 35,000 when it started in 2019 to 500,000 a month now. trip provides.
Local like Tata Motors and Mahindra & Mahindra car manufacturers have invested heavily, foreign players like Kia and BYD have announced premium models for the Indian market.
About 40% of India’s fuel demand is diesel, which is mostly used by trucks.
Chetan Maini, chairman of electric mobility solutions provider Sun Mobility, said India’s small trucks, including three-wheelers, will be early adopters of the switch given the cost advantage for e-commerce and delivery firms.
Currently, his company has 80 battery swapping stations for two and three wheelers in Delhi and by March 20Plans to build 0 units.
“By 2030, a big opportunity will be on the freight side because the cost economics will work really well,” Maini said.
Reporting by Mohi Narayan in New Delhi; Additional reporting by Arundhati Sarkar in Bengaluru; Edited by Sam Holmes
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2023-01-27 06:59:53
Source – reuters
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