India's Gasoline Demand Could Peak by 2035 as EVs Gain Ground

India's gasoline demand may reach its peak by 2035 as electric vehicles become more popular and the adoption of battery-powered and natural gas vehicles increases, according to A.S. Sahney, chairman of the country's largest state-owned refiner, Indian Oil Corporation (IOC). Speaking at an industry event in Goa, Sahney noted that "Motor spirit is feeling pressure from all sides as demand for other refined products rises."

Diesel and jet fuel demand are expected to continue growing due to increased industrial activity and air travel, while fuel oil and petcoke demand, which make up about 30% of refining output, are also anticipated to climb. To bolster energy security amid surging crude oil prices resulting from the Middle East crisis, India must boost biofuel production and utilization, advised Tarun Kapoor, an adviser in India's Prime Minister's Office.

As the world's third-largest crude oil importer, India relied on the Middle East for roughly half of its imports prior to the Iran war, but has been grappling with higher costs since the conflict began. In June, India introduced a fuel blend containing an 85% ethanol component as part of the fuel flex mobility program to lessen dependence on imported oil.

Indian refiners are also expanding their capacity and exports to maintain regional supply. Oil Minister Hardeep Puri stated in September that India would continue exporting diesel to help meet global demand during the global diesel crisis, emphasizing that the country's refining capacity is increasing due to ongoing investments.

Currently, India's refining capacity stands at around 5.36 million barrels per day (bpd), with projections to rise to 5.8 million bpd within the next year. By 2032, India aims to have 6.4 million bpd of refining capacity, according to Puri.