Riding on a growing economy, India is a significant consumer of oil and natural gas. The country is Asia's third-largest oil consumer and world's fifth largest energy consumer. According to the International Energy Agency (IEA), hydrocarbons account for the majority of India's energy consumption while coal and oil satisfy about two-thirds of the same. Natural gas accounts for 7 per cent share, which is expected to increase with the discovery of new gas deposits.
The Indian oil and gas sector is one of the six core industries and has very substantial forward integration with the entire economy.
The petroleum and natural gas industry in India has attracted foreign direct investment (FDI) worth US$ 3, 338.75 million from April 2000 to March 2012, according to the data provided by Department of Industrial Policy and Promotion (DIPP).
According to the provisional production data released by the Ministry of Petroleum and Natural Gas in a press release:
According to Business Monitor International (BMI)'s India Oil and Gas Report for second quarter of 2012, India's average oil and liquids production for 2011 is estimated at 939, 000 barrels per day (B/D) which will touch the peak production at 1.06 million B/D in 2015. Further giving its demand outlook, BMI projects consumption to rise sharply to 4.07 million B/D by 2016 from 3.27 million B/D in 2011.
Total gas consumption is estimated by BMI at around 92 billion cubic meters (BCM) in 2016 from around 68 BCM in 2011.
Demand for diesel in India is growing at an annual rate of 8 per cent thereby, creating ample opportunities for private refiners. The country's petrol consumption increased by 3.7 per cent to 1.25 million tonnes (MT) while that of diesel was up 8 per cent to 5.9 MT during April 2012.
According to the data provided by the Petroleum Planning and Analysis Cell, petrol consumption in India during April-January 2011-12 was 12.35 MT. It is projected that India would consume 14.82 MT of petrol in the year, registering a growth of 4.41 per cent in FY12 while consumption of diesel is expected to be 63.91 MT, registering a growth of 6.4 per cent.
India's local oil products sale, a proxy for domestic oil demand, edged up 0.2 per cent to 12.66 MT during April 2012.
Gas, as an energy resource, is very high on demand across the industrial, residential and power sectors. BMI states that gas consumption in India has increased by more than 160 per cent since 1995 while average annual demand would grow by 6 per cent over next few years. Gas production is estimated at 52 BCM in 2011 while total gas consumption is predicted at 92 BCM in 2016 from an estimated 68 BCM in 2011 by BMI.