Report on “Reducing oil import dependency” 22/05/2019 – Posted in: Daily News – Tags:

REPORT ON “REDUCING OIL IMPORT DEPENDENCY”

 

For: Mains
Topic covers: Key highlights of report, Significance, need of the hour and way ahead

 

News Flash

A high-level committee submitted its report to the Oil Ministry on a strategy to reduce India’s oil import dependence.

 

Why was High Level committee constituted?

  • The committee was formed to discuss research-related synergies and tax issues for state-run oil companies.
  • The committee also explored the possibility of forming a new entity for oil services and related manpower.
  • It also explored the need and possibility of formation of new entity dealing with oil services and supply of qualified manpower to oil and gas sector around the world.
  • Committee also looked into mergers, acquisitions and consolidation of oil and gas public sector undertakings (PSUs) and the joint ventures.

Committee members: Anil Kakodkar (scientist) and Sidharth Pradhan, an expert on financial and tax issues.

 

Import Dependency

  • During 2018, India consumed 204.92 million tonnes of petroleum products and 58.64 billion cubic metres of natural gas while the domestic production of crude oil and natural gas almost stagnated.
  • The import dependency of crude oil and LNG during the year was 82.59 per cent and 45.89 per cent, respectively which is likely to increase in days to come.
  • During 2018, petroleum import (Rs 7,028.37 billion) was 23.42 per cent of total gross import (Rs 30010.2 billion) of the nation.

 

Why there is a need of new strategy?

  • India’s projected oil demand is going to grow at CAGR 4 per cent during 2016-2030 against the world average of 1 per cent though the projected oil demand will be much lower as compared to the US and China.
  • India is thus at a very precarious situation and to secure its energy needs in a sustainable manner, out-of-box solutions are needed.

 

Committee’s recommendation

  • The Committee has recommended short term, medium term and long term strategies in the report, clearly bringing out the strategy to reduce the import dependency of the nation.
  • The Petroleum Ministry will consider the recommendations while formulating policies on the issue.

 

Source: Economic Times

 

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