New Delhi: India’s oil demand is expected to grow at a compound annual rate of 3 to 5 per cent through 2030, outpacing China’s, although the country’s energy import dependence is projected to rise further, according to a report by Moody’s Investors Service.
The report titled “Oil and Gas – China and India: Investment and demand trends diverge, but Chinese companies will retain credit edge” said China’s oil demand will likely peak by 2030, driven by slower economic growth and increasing adoption of electric vehicles.
India’s crude oil consumption, in contrast, will continue to rise, supported by strong economic expansion and growing industrialisation. Moody’s projected India’s real GDP growth at 6.3 per cent in 2025 and 6.5 per cent in 2026, making it the fastest among G20 economies.
The report said India imports close to 90 per cent of its crude oil and about 50 per cent of its natural gas requirements. If domestic production does not increase significantly, import dependence will rise further.
In contrast, China’s crude oil and gas production has been growing steadily in recent years, supported by government directives for national oil companies (NOCs) to boost exploration and development. Moody’s said this trend would help reduce China’s import reliance.
India’s refining capacity is projected to increase from 256.8 million metric tonnes per annum (mmtpa) in April 2024 to 309.5 mmtpa by 2030. China, meanwhile, is approaching its state-mandated refining cap of 1 billion tonnes.
India’s natural gas demand is expected to grow 4 to 7 per cent annually until 2030, with the government targeting to raise gas’ share in the energy mix to 15 per cent from the current 6 per cent.
Chinese NOCs including CNPC, Sinopec and CNOOC accounted for over 90 per cent of the country’s oil and gas output and hold significant integrated operations across the upstream, refining, and marketing segments.
In India, ONGC and Oil India contributed about 70 per cent of the country’s oil and gas production in FY24-25, while BPCL, IOCL, and HPCL along with joint ventures handled around 70 per cent of the refining throughput.
Moody’s observed that Indian NOCs face higher taxation, lower operational scale, and weaker credit metrics relative to Chinese peers. Indian firms also allocate more capital to downstream expansion, unlike Chinese companies that focus significantly on upstream.
Capital expenditure by Indian NOCs was around USD 15 billion in FY24, compared to about USD 100 billion by Chinese NOCs.
The report said China’s fuel pricing regime is more market-oriented, enabling faster cost pass-through. In India, static retail prices during oil price spikes in 2022 led to financial stress for oil marketing companies, including under-recoveries of approximately ₹40,000 crore on LPG in FY25.
Moody’s also said the petroleum sector accounted for 16 per cent of the Centre’s and 8 per cent of state governments’ total revenue in FY24, mainly through taxes and dividends.
On the energy transition front, CNPC plans to produce one-third of its energy from renewables by 2035, while Sinopec aims for carbon neutrality by 2050. India has set a net zero target for 2070.
