The slippery slope of oil exploration
Business Standard|April 17, 2023
Poor policy design and unpredictable fiscal terms have discouraged investment by global majors, keeping India heavily import-dependent
S DINAKAR
The slippery slope of oil exploration

Successive Indian governments have formulated policsumers of energy at the expense of producers. The current dispensation is no different. Motorists have taken comfort in frozen pump prices and gas price caps but producers face high taxes, and restrictions on pricing freedom.

The government is focused on revenue generation rather than production maximisation. But protecting the interests of consumers, and imposing high costs on upstream operators, may work in nations with copious oil reserves and relatively negligible domestic demand, such as Saudi Arabia, Qatar or Russia. Not so in case of energy-deprived countries like India - it only makes the nation increasingly dependent on foreign oil and gas, weakening energy security.

Check out these numbers. Domestic production of crude oil has declined 23 per cent to an estimated 29 million tonnes last fiscal from nearly 38 million tonnes or 763,000 barrels a day (b/d) in 201314, according to oil ministry data.

India's oil product demand rose over 40 per cent during the period, driven by higher GDP, subsidies and lower-than-market prices of transport and cooking fuels.

Crude output in February dipped to a low of 575,000 b/d. To put it in perspective, domestic production met 24 per cent of our oil demand back in 2014. Today that figure has shrunk to 13 per cent. Staterun explorers lack the heft, finance and expertise of oil majors to arrest declines from ageing fields, and for deep-water developments.

The impact on energy security is glaring. India's dependency on imported crude as a percentage of consumption was at an all-time high of 89.2 per cent in February against 84 per cent in 2020-21, and 77 per cent in 2014, government data shows. This is despite Prime Minister Narendra Modi's call in early 2016 to reduce crude imports by 10 per cent by 2022.

Denne historien er fra April 17, 2023-utgaven av Business Standard.

Start din 7-dagers gratis prøveperiode på Magzter GOLD for å få tilgang til tusenvis av utvalgte premiumhistorier og 9000+ magasiner og aviser.

Denne historien er fra April 17, 2023-utgaven av Business Standard.

Start din 7-dagers gratis prøveperiode på Magzter GOLD for å få tilgang til tusenvis av utvalgte premiumhistorier og 9000+ magasiner og aviser.

FLERE HISTORIER FRA BUSINESS STANDARDSe alt
Business Standard

How AI is Disrupting the Literary World

This summer, Ayad Akhtar was struggling with the final scene of McNeal, his knotty and disorienting play about a Nobel Prize-winning author who uses artificial intelligence to write a novel.

time-read
4 mins  |
November 02, 2024
Business Standard

Dark store surge set to spur realty demand

Quick commerce (qcom) firms are poised to impact India's real estate landscape as they expand their dark store networks to meet the growing demand.

time-read
3 mins  |
November 02, 2024
The Bibek I knew
Business Standard

The Bibek I knew

It was the early 2000s when I was setting up an economics research practice.

time-read
4 mins  |
November 02, 2024
Business Standard

Saudi revives India investment plans amid shrinking mkt share

Move aimed at ensuring a major captive market for its crude oil, even as Indian refiners mull reducing the share of expensive Saudi grades sourced under term contracts

time-read
3 mins  |
November 02, 2024
Business Standard

Tech, threats, territories - navigating industry growth in the new world order

As I step into my role as president of Nasscom, I view the next five years as a critical period, shaped by the intersection of three forces: Technology, threats, and territories.

time-read
4 mins  |
November 02, 2024
STARS AND STYLE
Business Standard

STARS AND STYLE

The two biggest ever stars of Indian movies have followed contrasting styles as brands

time-read
4 mins  |
November 02, 2024
Business Standard

Overhaul of HVLDE norms on cards

Market regulator Sebi has proposed an overhaul to the framework governing high-value listed debt entities (HVLDEs) in a bid to reduce the compliance burden.

time-read
1 min  |
November 02, 2024
Sebi moots changes to ERP framework
Business Standard

Sebi moots changes to ERP framework

Revision to allow ERPs to rate unlisted securities

time-read
1 min  |
November 02, 2024
Business Standard

Testing the Midwestern assumption

Every now and then, a moment comes when the assumptions underlying a nation's politics are completely overturned.

time-read
3 mins  |
November 02, 2024
Business Standard

From alienation to acceptance

A third of the way into Matthew Rankin's Universal Language, one stops wanting to know the film's secret and begins swimming in its mystery instead.

time-read
3 mins  |
November 02, 2024