India Shifting Toward Group II


MUMBAI – API Group II base oils are gradually gaining popularity in India and are expected to nudge aside Group I as the dominant grade by 2030, an industry insider told attendees at a conference held here last month.

Overall base oil consumption in the country sat at 2.1 million metric tons in 2016 and is expected to rise to 2.4 million tons by 2020 and 3.2 million tons by 2030, Farzad Zandi, commercial director for Sepahan Oil Co. of Iran said at the Asia, Middle East and Africa Base oil, Lubricants and Wax conference in early August.

Group I accounted for 71 percent of the total in 2016, or 1.5 million tons, Zandi said, while 400,000 tons of Group II were consumed and 40,000 tons of Group III, accounting for 19 and 2 percent, respectively. By 2020, Zandi believes Group I consumption will slip to 1.4 million tons, Group II will inch up to 600,000 metric tons and Group III should experience a healthy bump up to 100,000 tons.

By 2030, however, that breakdown will shift significantly, as Sepahan forecasts Group I consumption to decline to 1.1 million tons, or 34 percent of the projected total for that year. The refiner predicts that Group II consumption will skyrocket to 1.4 million tons, or 44 percent of the market.

Group I base oil will dominate the Indian market until 2020 but will lose much of its share to Group II in 2030, Zandi told attendees of the conference, which was jointly organized by Petrosil and Rex Fuels.

The shift toward more highly refined base stocks will be driven by several factors, including rising original equipment manufacturer demands for finished lubricant performance and increasingly stringent emission norms, Zandi said. Other factors include tougher fuel efficiency standards and advancements in lubricant additive technologies.

The transportation segment will continue to consume the biggest chunk of Indias lubricants market, as the volume of transportation lubes will rise from 1.1 million tons in 2016 to 1.3 million tons in 2020 and 1.8 million tons by 2030, Zandi asserted. Industrial lubricants consumption, however, will also experience healthy growth, increasing from 900,000 tons in 2018 to 1 million tons by 2020 and 1.4 million tons in 2030.

Commercial vehicles – including trucks, three wheelers, construction, mining and farm vehicles – consumed will maintain its dominance in the market, increasing from 800,000 tons in 2016 to 1 million tons, 73 percent of transportation lubes in 2016. That share is forecast to rise to 75 percent in 2030.

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