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.
Bu hikaye Business Standard dergisinin April 17, 2023 sayısından alınmıştır.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
Already a subscriber ? Giriş Yap
Bu hikaye Business Standard dergisinin April 17, 2023 sayısından alınmıştır.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
Already a subscriber? Giriş Yap
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.
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.
The Bibek I knew
It was the early 2000s when I was setting up an economics research practice.
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
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.
STARS AND STYLE
The two biggest ever stars of Indian movies have followed contrasting styles as brands
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.
Sebi moots changes to ERP framework
Revision to allow ERPs to rate unlisted securities
Testing the Midwestern assumption
Every now and then, a moment comes when the assumptions underlying a nation's politics are completely overturned.
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.
