India is one of the few major economies to come through the 2007 recession unscathed, said Suresh, who is based at Indian Oils head office in Mumbai. With a population of about 1.27 billion and estimated current annual GDP growth of 5 percent, the nation anticipates high growth in its automotive industry and corresponding growth in lubricants.

Until 1992, Indias petroleum sector was dominated by its national oil companies, but the lubricants sector was deregulated in 1993, and fuel retailing was deregulated in 2002.

Indias vehicle population today numbers about 150 million vehicles. About 72 percent are two wheelers; passenger cars account for 13 percent; and the remainder are trucks and buses (7 percent), three wheelers (5 percent) and tractors (3 percent).

Automotive changes will drive the lubricant industry, and domestic sales are growing fast, Suresh noted. Since 2004-2005, domestic sales of passenger cars have grown 21 percent per year, commercial vehicle sales have grown 22 percent per year, three wheeler sales 10 percent and two wheeler sales almost 17 percent.

Suresh estimated that Indias additized finished lubricants market is about 1.45 million metric tons per year now, of which 68 percent is automotive lubricants and 32 percent industrial. Transformer oils, process oils, white oils and unadditized oils account for another 1.15 million metric tons.

Total base oil demand in India today is 2.4 million metric tons, Suresh continued, but indigenous production totals just 1.13 million tons, resulting in net imports of 1.27 million tons per year. Indias four base oil producers currently make a total of 605,000 t/y of Group I and 525,000 t/y of Group II, but no Group III.

Fuel economy, emissions controls, extended drains and the overall need for higher performance are game changers in base oil requirements in India, Suresh said. For example, an information brochure is now displayed at the point of sale to educate vehicle buyers on fuel economy.

Suresh predicted the following changes in base oil use in Indias key lubricant categories over the next five years:

Source: R. Suresh, Indian Oil

In drivelines, the need for extended oil drains and efficiency improvements will push India to Group III and polyalphaolefins, said Suresh:

Source: R. Suresh, Indian Oil

In Indias industrial oil market, Suresh predicted that the need for greater oxidation stability and higher viscosity index in particular will push the move from Group II to Group III and polyol esters:

Source: R. Suresh, Indian Oil

Likewise, in the Indian metalworking fluid market, estimated to reach 95,000 tons by 2018, Suresh predicted Group I demand will fall from todays 60 percent to 45 percent in 2018. Group II demand will rise from 20 percent now to 25 percent in 2018, and naphthenics, vegetable oils and esters will grow from 20 percent today to 30 percent in five years.

The transformer oil market, estimated to grow to about 350,000 tons by 2018, will see a move away from paraffinic oils (80 percent of todays transformer oil market) to naphthenics and GTL. Pale oils are estimated to account for 30 percent of the transformer oil market by 2018, GTL for 10 percent, leaving just 60 percent of the market to paraffinic oils.

Indian producers plan no new base oil facilities nor base oil expansions in the foreseeable future, Suresh concluded. Group II base oil refineries would improvise to conjure Group III. The country can look forward to importing the Group III and naphthenics required to make its higher quality lubricants.