Report of the Working Group on Petroleum & Natural Gas Sector for the XI plan
Demand - Supply Gap Analysis for XI Plan Period
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Demand - Supply Gap Analysis for XI Plan PeriodDemand for Petroleum ProductsVarious groups have estimated long-term demand projections for oil for the country from time to time. Some of the main projections are contained in: India Vision 2020, India Hydrocarbon Vision 2025 Energy Information Administration (EIA) and International Energy Agency (IEA) While the projections by IEA and EIA are based on lower GDP growth rates and are in the range of 230 MMT to 264 MMT, India Hydrocarbon Vision (IHV) 2025 projects the demand for the year 2025 in the range of 235 MMT to 368 MMT. The details of projections made by different groups are given in Annexure – VI. Projections for XI Plan Oil industry in the country has undergone major transformation in the past few years. From deficit situation till 1999-2000, the country is now net exporter of petroleum products. Globalization of Indian economy along with high international oil prices which are a pass-through in the bulk sector has induced improvement in energy efficiency and shift of demand from liquid to natural gas/LNG wherever possible. Further, improvement in road infrastructure and better vehicles has had a sobering effect on the demand for road transportation fuels. Besides, there is growing contribution from the services sector in country’s GDP composition. Low demand in transport fuels like MS and HSD is also due to factors like expansion of city gas distribution networks i.e. CNG which has grown from just under 50 TMT sales in 2000-01 to around 0.5 MMT in 2005-06 recording a CARG of 60.9 percent. Besides, introduction of Metro in Delhi and its expansion to the National Capital Region (NCR), Mumbai and Bangalore will have significant impact on demand for MS/HSD in future. Hence, it is estimated that POL demand would continue to grow at moderate rate of growth during XI Plan also. In future, blending of MS by ethanol and introduction of bio-diesel may also have a significant impact, though not on the demand per se but in increasing the production surplus of unblended MS and HSD. Approach Adopted to Estimate Future Demand The following two approaches have been considered for assessing the oil requirements for future. Top-down Approach: Overall energy requirements with share of various fuels in the primary commercial energy basket (considered by Planning Commission and reported in IEP) by linking GDP with energy elasticity. Bottom-up Approach: End use approach considering the impact of various parameters. While assessing the requirements factors like impact of gas, vehicle population growth, improved fuel efficiency, technological improvements in engine designs, impact of auto LPG, CNG expansion, impact of Metro rail, impact of high oil prices, conservation/efficiency improvement issues, aviation policy of the Government, growth of passenger and cargo traffic, fleet expansion plan of airlines, National Highways Authority of India (NHAI) road construction projects, Railways freight policy, electrification plans of railway tracks and construction of freight corridor etc. have been considered. Declining Elasticity Factor discussed above have resulted in weakening the relationship between GDP growth and POL growth. Demand elasticity is declining as can be seen in the table below:
One of the major reasons for declining elasticity is far higher contribution of services sector compared to past while contribution from the manufacturing sector has more or less remained the same, but it too has improved its efficiency. Year-wise composition of GDP for past few years is given below:
It is expected that the trend witnessed in POL consumption to intensify, with high oil price acting as a catalyst towards further reducing consumption and improving efficiency. The dominance of services sector is also anticipated to continue in the XI Plan. Projected Demand Based on the above analysis the demand of petroleum products have been estimated in two scenarios – Base Case and Upper Case. In Base Case, the consumption in the terminal year of the XI Plan, i.e. in 2011-12 is estimated at 132 MMT indicating a growth of 2.9 percent per annum. The year wise details are given below.
In the Upper case, the demand is estimated to grow by 4.45 percent to 142 MMT. The demand under upper case scenario is as follows:
The year wise, product wise figures are given in Annexure – VII. It may be mentioned that since the oil prices are expected to remain at a high level in future, alternate sources of energy are likely to become increasingly economically viable. In projections impact of such alternatives has not been considered and the actual materialization may be different from the one projected now. In addition, policy initiatives, which encourage energy efficiencies, could lower the oil demand growth even further. Some possibilities in the transport sector are discussed in Annexure VIII. Projections for 2016-17 and for 2021-22 Projections beyond XI Plan are more difficult as uncertainties increase proportionately. Since demand is a function of so many factors, none of which can be accurately determined today, including future technologies, state of the economy, development of alternatives and new products, geopolitical developments etc., assumptions made for working out projections can easily undergo a radical change. Besides, in the context of extremely volatile crude and product prices in the international markets, predicting energy demand is hazardous. Hence, long-term projections made below are just a rough estimate, indicative and directional and may be used with caution. Demand for terminal years of XII Plan are estimated to be as under:
The projected demand is higher mainly on account of higher consumption of naphtha mainly in petrochemical plants projected to come up by that time. Indicative demand in the terminal year of XIII (2021-22) Plan is estimated at 190.3 MMT for Base Case and 212.9 MMT under Upper Case. Directory: aboutus -> committee -> wrkgrp11 aboutus -> A voice In The Wilderness aboutus -> Curriculum vitae daniel allen weymouth aboutus -> Mock or skit: Date: April 21st 2016 Location: Kennard-Dale High School Time: 0700-1245 aboutus -> Indonesia individual Action Plan Update for Indonesia for 2016 aboutus -> Spartan Speak Newsletter aboutus -> Ryan Minor aboutus -> Concern behavioral and Management Solutions wrkgrp11 -> Ministry of Environment & Forests, Government of India Report of wrkgrp11 -> Report of working group on automotive industry Download 1.87 Mb. Share with your friends:
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