Last week, India’s top two fuel retailers offered a glimpse into their future. One that’s markedly different from the status quo.
State-owned Indian Oil Corporation (IOC) said it would set up 10,000 electric vehicle charging stations over the next three years. Two days later, Bharat Petroleum Corporation Ltd (BPCL), IOC’s public sector sibling, followed suit. BPCL said it would roll out 7,000 charging stations in the next few years, without specifying a timeline. IOC and BPCL currently have around 450 and 30 charging stations, respectively.
It’s hardly a coincidence that these announcements came soon after the COP26 COP26 COP26 The 26th UN Climate Change Conference. COP stands for Conference of the Parties climate summit in Glasgow. India made headlines at the event by committing to reduce its net carbon emissions to zero by 2070. In fact, SM Vaidya, chairman and managing director of IOC, said the company’s plans are the first step first step The Times of India IOC to set up 10,000 EV charging stations in 3 years Read more towards helping India achieve its net-zero target.
IOC and BPCL aren’t the only state-run oil majors planning for a future beyond hydrocarbons. Oil and Natural Gas Corporation (ONGC), the country’s largest oil and gas producer, wants to increase its renewables capacity from 0.3 GW as of March 2021 to 10 GW by 2040.
But even as these companies begin their energy transition, they have a more urgent priority: meeting India’s rising appetite for oil.
This decade, demand for oil in India is expected to grow 5.1% on average every year, according to the International Energy Agency’s (IEA) forecast forecast IEA World Energy Outlook 2021 shows a new energy economy is emerging – but not yet quickly enough to reach net zero by 2050 Read more last month. Global consumption, on the other hand, is set to rise just 0.9% annually.
A growing population and rising incomes combined with nascent alternative fuels and electric vehicles mean that crude will continue to be a vital energy source in India for the foreseeable future.
“Anybody who is producing oil in India is going to be in business for a long time,” says Anish De, national head for energy, natural resources, and chemicals at consulting firm KPMG. The problem, though, is that India doesn’t produce a whole lot of oil.