An open Letter to Mr. Nitin Gadkari!

Oil demand will keep on rising regardless of how many electric cars are plying on our roads!

In a recent public meeting, our honorable minister for Road Transport & highways, Mr. Nitin Gadkari had issued warning to all the automobile company’s CEOs that adopt cleaner fuel till 2020 otherwise they will be bulldozed by the government. According to him, it will eventually help in curtailing the pollution from petrol & diesel vehicles. Recently, Bloomberg news energy released a report which says that the five biggest oil companies – Exxon Mobil Corp., Royal dutch shell Plc, Chevron Corp., BP Plc& Total SA collectively curbed their pollution at an average of 13% between 2010 & 2015.

Now, one of the hottest debate over the developing as well as developed countries is demand of oil. If we adopt greener fuel then it will help in reducing our dependence on crude oil.
No doubt the recent announcement by Mr. Gadkari will grab more headlines over the coming few years for the adoption of electric vehicles and industry experts will join as panelists on news channels to discuss how it could be the crucial beginning of the end for crude oil and we are assuming that it will help in reducing the oil demand but at the same time we are neglecting the role of heavy trucks & freight play in driving demand.We need fuel efficient vehicles across the developing as well as developed countries that are currently not using required fuel efficient standards. If we will not use this then no matter what policies our government will announce, oil demand will keep on rising. 

Economist look at the increase or decrease in the movement of heavy trucks & freight before predicting anything about the economy as both are the indicators of economic growth and both of them are correlated to the GDP. Recently, an international agency published a report that out of 40 countries, only four (US, CHINA, CANADA, JAPAN) have fuel efficiency standards for heavy trucks that means only one-tenth out of the total. Heavy trucks alone contribute 40 percent of the total growth in oil demand. Trucks burn about 17 million barrels of oil per day (mb/d ) or about one fifth of the total global demand. Much of the growth in consumption of oil will come from India & China in the coming few years where 90 percent of the additional barrels for freight will be consumed.

Now, given the circumstances, our government should encourage & adopt cleaner fuel efficiency standards so that the heavy trucks emit fewer pollutants.
There are three possible areas for improvement:-
First, Heavy trucks should have GPS enabled  to optimize trucks routing so that it can reduce empty trips. Second, Zero Emission/fuel efficient engines, it will help in emission of fewer pollutants. Third, adoption of bio fuels.

No matter how much you or any other minister put out schemes in the automobile sector to curb pollution, if we do not look into the segment which is contributing 40 percent of total global oil demand then regardless of every car which is plying on our roads is electric, oil demand will keep on rising!