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China Economic Slowdown News: According to a recent report by HSBC, India is soon poised to become a major destination for global oil and gas products. The main reasons behind this change are the country’s increasing refinery capacity, petrochemical production, LNG regasification, and pipeline network. On the contrary, the slowdown in China’s economy has given India an opportunity to move forward rapidly in this sector.
Oil prices in favor of India
According to the report, there is a possibility of decline in global crude oil prices, which will directly benefit India. India imports more than 80% of its crude oil needs.
- Reduction in import bill:
- India’s import expenditure will reduce due to falling oil prices.
- This will reduce the burden on the country’s economy and lead to financial savings.
Increase in refining and production capacity
The HSBC report states that by FY 2025, India’s:
- LNG regasification capacity will increase by 25%.
- Refining capacity will increase by 9%, adding 0.5 million barrels per day to India’s capacity.
These changes will make India competitive in the global oil and gas industry.
India moving towards energy transition
India is moving towards energy transition through its major oil and gas companies.
- Refinery Transformation:
- Emphasis is being laid on projects like petrochemicals and refinery upgrade.
- Preparations are being made to adopt new and clean sources of energy.
Decline in demand for diesel
There is a decline in demand for diesel in India. according to the report:
- Diesel consumption is likely to decline further in the coming times.
- Despite this, India’s energy policies are taking the country towards energy self-sufficiency.
Benefit of China’s economic slowdown
The economic slowdown in China and the increasing popularity of electric vehicles (EVs) have led to a decline in demand for transportation fuels there.
- This has given India an opportunity to become a major player in the global oil and gas industry.
- India is using this opportunity to strengthen its position in the global energy market.
favorable environment for companies
According to HSBC report, India’s major oil companies:
- HPCL
- BPCL
- IOCL
These companies will benefit from falling oil prices and have been given a ‘buy’ rating.
- At the same time, ONGC has been advised to ‘reduce’ in view of the risk of decline in production.
Possibility of increase in gas prices
Even if oil prices fall in the future, gas prices are likely to rise.
- According to the report, the LNG market will remain tight until 2027.
- During this time, India is ready to further strengthen its global position.
Golden opportunity for India
Due to China’s economic slowdown, India has an opportunity to create a strong position in the global oil and gas market.
- increase in refining capacity
- Improve capacity of LNG absorption
- Focus on energy transition
Due to these factors, India is fully prepared to take full advantage of this opportunity.