India Petroleum Oil & Coal Imports to Rise with Growing Energy Demand

13 September 2021

The sharp rise in energy demand predicted over the next decade will make India to import more petroleum oil and coal as renewable energy on its own may not be able to cater the entire incremental demand. That would create challenges for the country to low emissions at the desired pace. Export Genius data shows petroleum oil and coal together account for 70% of India’s energy basket, in which petroleum liquids share 25% and coal share 45%.

The International Energy Agency recently said that India could witness the biggest increase in energy demand in the world over the next 20 years, with the potential for oil consumption increasing as high as 4 million b/d to 8.7 million b/d by 2040.

India Imports Petroluem Oil Jan-Jun 2021

According to India import data, India’s imports of petroleum liquids declined in April, May and June in period of Jan-Jun 2021. The top import sources of petroleum oil are South Korea (24.6%), United Arab Emirates (22.5%), Singapore (9.9%), Qatar (8.3%), Saudi Arabia (8.2%), United States (4.8%), Iraq (3.3%), Oman (3.0%), Taiwan (2.9%) and Netherlands (2.6%). Below given chart shows dollar amount of India imports petroleum oil recorded in Jan-Jun 2021.

India Imports Coal Jan-Jun 2021

India’s coal imports fluctuated in first six months of 2021. Except March months, all other months recorded a decline in the value of shipments. The top import sources of coal are Australia (48.2%), Indonesia (22.0%), South Africa (12.3%), United States (9.0%), Russia (3.9%), Mozambique (2.0%), Canada (1.5%), Kazakhstan (0.3%), New Zealand (0.1%) and Austria (0.1%). Below given chart shows dollar amount of India imports coal from Jan to Jun 2021.

Lower Emissions a Concern for India

A key challenge for India is the fact that 70% of its CO2 emissions come from burning coal, predominantly in the power sector. India’s annual electricity demand is anticipated to grow an average by 4.4% over 2020-2030. The coal power capacity is projected to grow from present 203 GW to 220-230 GW by 2025. Industrial coal demand is expected to remain firm as power, cement and steel companies are dependent on coal with a lack of affordable alternatives. Here is percentage share of India’s total primary energy consumption by fuel type recorded in 2019.

India will face a major challenge to lower emissions by reducing dependency on coal & petroleum liquids imports. At the same time, the country needs to import more coal and petroleum products to meet growing energy demand. Indian policy makers will look alternatives for better solutions.