M K Surana, the chairman and managing director of Hindustan Petroleum Corporation Ltd (HPCL) , said electric vehicles will not be a threat to the oil industry “at least for the next ten years” as it will snatch away only a part of the “incremental demand” and “not disrupt the existing demand”.

“The main concern now (with the push for EVs) is that, is it the end game for the oil industry; we do not believe that. Does it mean that it is business as usual; the answer is no,” Surana said at a media conference on Wednesday.

The slowdown in the auto sector, according to Surana, was “very natural” as customers were “holding back” on purchases/expansions with BS6 fuels being made compulsory from April next year.

“While there are talks of EVs, motor spirit (petrol) growth has been good last year and even in last quarter, but diesel growth has been slightly lower last year and in the last quarter, it was even lesser,” he said attributing this, among other reasons, to a “change in the mix of petrol-diesel driven vehicles to more towards petrol vehicles”.

Diesel vehicles, which constituted about 43 per cent of the total mix, has come down to 26 per cent. Petrol vehicles, especially passenger vehicles, have increased.

“So, there is a sluggishness in the demand for diesel driven vehicles but not petrol driven vehicles,” he said.

‘Some 5.1 million EVs are in operations today’

“Because, the EV penetration in the country is hardly anything as on today. Even in the world, it is hardly anything today. Out of some 1.6 billion cars in the world, some 5.1 million EVs are in operations today and there will be hardly hundreds in India. So, definitely, it doesn’t impact the oil industry,” he said.

“The most optimistic estimates also suggest that by 2030 or so, six per cent of the incremental car purchases maybe EVs,” he said.

“So, I don’t think that even the most aggressive policy decision can make a pan India impact on the total demand for fossil fuels. I think, there is almost a consensus that for at least another ten years, fossil fuels will continue to be the major portion of the energy basket. But, the way the country is growing, there is a huge need for energy, we are the third largest consumer of energy, so we need multiple sources of energy, and in that you will have a component of renewables and bio fuels, but they will take away only a part of the incremental demand but may not disrupt the existing demand,” he asserted.

In the passenger segment, there is a reduced demand for diesel vehicles but not in the commercial segment.

The arrival of EVs may not disrupt diesel demand completely because EVs are aimed at the passenger segment and not for the commercial sector. “There is a long time to go for any alternative means for the commercial segment,” he said.

“It is not that the diesel demand is being disrupted. There will be growth, whether the growth will be 4 per cent or 5 per cent, may not be, but it could be 2 per cent or 2.5 per cent,” he added.