India, a nation of 1.3
billion people, is the fastest growing major economy in the world with an
economic growth rate of 7.1%. India is also the fourth-largest net importer of
crude oil importing 80% of its crude oil and other petroleum needs. OPEC has
estimated that India’s demand for oil will reach 10 million b/d by 2040.
India imports approximately 58% of its crude oil from the Middle East, mostly from Saudi Arabia and Iraq but Indian refineries have pushed for imports from Africa is the particularly light and sweet quality of its crude oil, which are (Nigeria), is rich in gasoline and diesel and low in sulfur.
In 2015-16, India imported nearly 23.7 million metric tons of Nigerian crude oil, worth $9.2 billion, accounting for almost 12% of its overall oil imports. It also imports some 2 million metric tons per year of LNG from Nigeria.
Unless it gradually reduces its dependence on imports by prioritizing indigenous production and hastens the implementation of energy efficiency mechanisms, India’s energy security would remain a cause of concern.
India’s aim would be to curtail energy consumption, improve the nation’s energy security, and build fuel efficiency.
To conclude, India acknowledges the negative implications of increased dependence on import of crude oil due to geopolitical uncertainties and volatility in the international oil markets. It stands at a crucial juncture in devising policies which will combine growth in the energy sector with conservation and are environmentally sustainable. The implementation of several measures would reduce imports by increasing supplies at a domestic level from all sources, namely coal, oil, gas, nuclear, renewables, among others, and thus enable India to attain sustainable energy security.
India has managed to
satisfy 63% of its natural gas demand through indigenous production and the
remaining 37% through imported LNG.
Faced with the scenario
of global oil price uncertainty, and pressures of huge domestic demand for
energy, India needs to chart a way forward to realistically meet its energy
requirements while simultaneously ensuring equitable economic growth.
Sourcing of India’s Oil
and Gas ImportsIndia imports approximately 58% of its crude oil from the Middle East, mostly from Saudi Arabia and Iraq but Indian refineries have pushed for imports from Africa is the particularly light and sweet quality of its crude oil, which are (Nigeria), is rich in gasoline and diesel and low in sulfur.
In 2015-16, India imported nearly 23.7 million metric tons of Nigerian crude oil, worth $9.2 billion, accounting for almost 12% of its overall oil imports. It also imports some 2 million metric tons per year of LNG from Nigeria.
Unless it gradually reduces its dependence on imports by prioritizing indigenous production and hastens the implementation of energy efficiency mechanisms, India’s energy security would remain a cause of concern.
Can India Expand its
Indigenous Oil and Gas Production?
The Indian government
adopted several strategies to mitigate the country’s dependence on imported
crude oil and gas. Hydrocarbon Vision 2025 (2002) aimed to reduce the
dependence on external crude and gas supply by enhancing indigenous supply
through exploration in frontier areas and proven areas, and the initiation of
exploration of non-conventional hydrocarbon resources.
The government target to
cut crude oil imports by half by 2030, Indian Railways is guaranteed to be the
biggest procurer of biodiesel, which would reduce its fuel bill by about $5.75
million.
Given the realistic
constraints of infrastructure development and the inherent challenges of
expanding this development to reach the whole country at once, the Indian
government will begin by connecting 10 million households through the piped
natural gas (PNG) network over the next 5 years. Further, to expedite the
expansion of the City Gas Distribution (CGD) network, the Indian government
accorded the highest priority in domestic gas allocation to CNG (transport) and
PNG (domestic households) segments.
Fuel-Efficiency Policies
Can Alleviate Oil and Gas Import Challenge
Fuel efficiency polices
make it mandatory for vehicle manufacturers to adopt critical technologies to
comply with norms for reducing the emissions of harmful gases in the
atmosphere. There are also many fuel efficiency polices already in place in
India since 2015.
The current government
has proposed the conversion of used vegetable oils from food chains into
biodiesel, which could be blended with diesel by fuel outlets; this initiative
is part of the overall strategy to cut energy imports and carbon emissions. The
government has a target to cut imports by half by 2030. Furthermore, in 2015,
the MoPNG permitted direct sale of biodiesel (B100) to bulk consumers such as
railway, shipping, and state road transport corporations.
Oil companies in India
have initiated several R&D programs for improving fuel efficiency and MoPNG
has rolled out an elaborate plan to reassess hydrocarbon resources in India’s
sedimentary basins and discovered small fields policy was approved to
incentivize hydrocarbon exploration. The new gas pricing formula was also
introduced to strike a balance between incentivizing exploration and the
production of gas in the country while protecting consumer affordability.
Policy Recommendations
and ConclusionsIndia’s aim would be to curtail energy consumption, improve the nation’s energy security, and build fuel efficiency.
To conclude, India acknowledges the negative implications of increased dependence on import of crude oil due to geopolitical uncertainties and volatility in the international oil markets. It stands at a crucial juncture in devising policies which will combine growth in the energy sector with conservation and are environmentally sustainable. The implementation of several measures would reduce imports by increasing supplies at a domestic level from all sources, namely coal, oil, gas, nuclear, renewables, among others, and thus enable India to attain sustainable energy security.
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