News Oil & Gas

EV rush makes oil marketing companies think beyond oil


Mumbai: Oil marketing companies (OMCs) – Indian Oil Corporation, Bharat Petroleum Corporation and Hindustan Petroleum Corporation – are facing a new challenge these days with every electric vehicle sold in the country eating into the sale of liquid fuel – petrol and diesel.

With EV sales steadily gaining pace, senior officials from these companies said they have already diversified into setting up electric vehicle (EV) charging infrastructure and battery swapping stations to offset the potential impact of lower fuel sales going forward.

“Every single EV coming in the market is impacting our petrol and diesel sales. Thousands of EVs are out of the liquid fuel ecosystem now. The portion of EVs is still insignificant but it is growing and is expected to reach a critical mass someday,” said a senior official at an oil marketing company.


According to the Federation of Automobile Dealers Associations (Fada), a total of 56,747 electric three-wheelers were sold in the domestic market in August, a 71% jump from 33,130 vehicles a year earlier. The share of three-wheelers in the total EV market climbed to 56.8% as of August, from 55.1% in the same month last year.In the electric passenger vehicle segment, sales doubled to 6,727 vehicles in August, from 3360 EVs a year earlier. The share of passenger vehicle segment in the total EV market has doubled to 2.2% as of August, from a year earlier.

In the electric commercial vehicle segment, a total of 515 vehicles were sold in August, a 84% rise from 280 vehicles a year earlier. The electric CV market share stood at 0.68% compared to 0.38% during the period under review.

In the EV two-wheeler segment, August this year saw sales of 62,396 units against 52,226 units, up 19.47%. Market share of electric two-wheelers rose to 5% from 4.4% during the period.

IOCL, BPCL and HPCL did not respond to emailed queries till press time. These companies have a combined more than 90% of India’s fuel retail market. Diesel is the most consumed fuel, accounting for about two-fifths of domestic fuel demand.”We are anticipating that in the next three to five years, EVs will gain much ground. So, this will impact the sale of fossil fuels. To counter this, we are chalking out an aggressive growth strategy in the alternative fuel segment,” said another official at an OMC, adding his company is currently in a wait and watch mode on its expansion plan for the refining business.

The OMCs, however, are taking refuge in the fact that until heavy vehicles and buses adopt alternate fuels, including compressed natural gas or CNG, demand for liquid auto fuels will remain strong.

According to the International Energy Agency (IEA), India’s daily oil demand is projected to rise to 6.7 million barrels by 2030 and to 7.4 million barrels by 2040.


Source link