MGI projects high demand growth for liquid fuels

McKinsey Global Institute (MGI) has projected highest compounded annual growth in demand for liquid fuels in India at 5.2% from 2006 to 2020. Globally, this demand is expected to grow by 1.9% a year, somewhat lower than growth rate of 2.2% predicted in 2007. Barring biofuels, oil demand is expected to grow at 1.7%. MGI said they have lowered their projections, as they expect lower demand as a result of contraction in gross domestic product (GDP) growth in 2008 and 2009. Moreover, enhanced energy efficiency in light-duty vehicles due to enforcement of specific norms will also lead to drop in demand. Liquid fuels not only include petroleum products such as gasoline and diesel but also bio-fuels. As compared to Middle East’s demand of 4.9 million barrels of oil per day (bpd) and China’s 7.1 million bpd, India’s demand will be three million bpd during 2006-2020. (March 27, 2009)