India is replacing China as the center of the world's oil demand growth as it's economy expands faster than any other major country and a growing middle class has more money to spend. India's oil demand grew by 300,000 barrels a day last year, double the average rate in the previous decade, according to a report by The Oxford Institute for Energy Studies this month. China's growth has slowed to 300,000 barrels from an average 500,000 barrels in the decade to 2013 as the government moves the economy away from heavy industry.
Since the turn of the century, China has guzzled oil as its economy expanded, helping drive up crude prices to above $100 a barrel. A slowdown in this growth in the past few years and a surge in production from the US to Russia and Saudi Arabia sent prices crashing to below $30 a barrel, pummeling oil-producing nations' economies.
"In this new era of slower Chinese growth, a new contender has emerged: India," Amrita Sen, chief oil analyst at Energy Aspects, and Anupama Sen, senior research fellow at Oxford Institute for Energy Studies, wrote in the report.
"Structural and policy-driven changes are underway which could result in India's oil demand 'taking off ' in a similar way to China's during the late 1990s." As living standards improve, Indians are buying more cars and the government is looking to boost the share of manufacturing in the country's gross domestic product, which traditionally has been services-led.
Source :economictimes.indiatimes.com
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