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Indian Economy Assignment
Indian Economy Assignment
Indian
Subject Name:Indian Economy
209
Subject Code:209
mi
Ashish Sin 01190
Submitted to:
Name of the Faculty
Submitted by:
Dr Laxmi
BBA Name:Ayush Bansal
Enrollment
no:01290101720
Course:BBA(G)
3
Semester:3RD Semester
Table Of Content
S.No Content
03 Consumption
06 Biblography
Topic
The oil and gas industry in India dates back to 1889 when the first oil
deposits in the country were discovered near the town of Digboi in the
state of Assam. The natural gas industry in India began in the 1960s with
the discovery of gas fields in Assam and Maharashtra (Bombay high). As
on 31 March 2018, India had estimated crude oil reserves of 594.49
million tonnes (MT) and natural gas reserves of 1339.57 billion cubic
meters (BCM).
India imports 82% of its oil needs and aims to bring that down to 67% by
2022 by replacing it with local exploration, renewable energy and
indigenous ethanol fuel. India was the second top net crude oil (including
crude oil products) importer of 205.3 Mt in 2019.
By March 2021, India’s domestic crude oil production output fell by 5.2%
and natural gas production by 8.1% in the FY21 as producers extracted
30,491.7 Thousand Metric Tonnes (TMT) of crude oil and 28670.6
Million Metric Standard Cubic Metres (MMSCM) of natural gas in the
fiscal. In August 2021, crude oil production decreased by 2.3%, but there
was a 20.23% increase in homegrown natural gas
Oil And Gas Import
India is heavily dependent on crude oil and LNG imports with 82.8%
import dependence for crude oil and 45.3% for natural gas/LNG. The net
foreign exchange outgo is 63.305 billion US$ in the financial year 2017–
18 on account of crude oil imports. India generated 35.2 million tons of
petroleum products from indigenous crude oil production whereas the
consumption of petroleum products is 204.9 million tons.
Similarly India generated 31.7 bcm natural gas locally against the
consumption of 58.1 bcm. In 2019, India was the fifth largest importer of
LNG. LNG price is linked to the prevailing crude oil price in global
markets.
India is the second biggest importer of crude oil and its products after
China. In the year 2019, US is going to become net exporter of
LNG, LPG, crude oil and its products from its shale oil production
boom. Shale oil production cost in US would be the higher ceiling price
for the crude oil in international trade as its substantial production is
consumed internally substituting the imports.
Due to lack of adequate petroleum reserves, India has to depend mostly on
crude oil imports in near future till its renewable energy resources such as
solar, wind, hydro and bio-mass are exploited adequately to
achieve energy security by replacing the petroleum products consumption
which are also major contributors to the air pollution. In such adverse
situations, India has to proactively play a major role in global crude oil
trade as swing oil producer by using its limited crude oil production base
to bring down the high price of crude oil fixed by OPEC+ and the Big
Oil. International crude oil prices vary steeply for a small mismatch
between global supply and global demand. To become swing oil producer,
India should enhance crude oil extraction rate twice of the normally
designed rate for continuous extraction from its developed oil fields and
extract crude oil on intermittent basis only when crude oil prices exceed a
preset upper ceiling value instead of continuously extracting oil.[44]
Also, India and China being major oil importers, both countries should
coordinate for mutual benefit while trading in global oil markets to
moderate the crude oil price and nullify the oil pricing power of OPEC,
etc. Normally, crude oil pricing and gold pricing exhibit opposite trends in
global trading (i.e. while one appreciates the other depreciates). India
should also procure crude oil in futures market by hedging gold.
Consumption
India is the third largest consumer of crude oil in the world, after the
United States and China. The country accounted 4.81% of total world oil
consumption in 2016–17. The estimated total consumption of crude oil in
India rose from 160.77 MMT in 2008–09 to 251.93 MMT in 2017–18
with a CAGR of 4.59%. High speed diesel oil accounted for 39.3% of
total consumption of all types of petroleum products in 2017–18, followed
by petrol (12.7%), petroleum coke (12.4%), liquefied petroleum
gas (11.3%), and naphtha (6.1%). The country accounted for 1.41% of
total world natural gas consumption in 2016–17. The largest consumers of
natural gas are the fertilizer industry (27.78%), power generation
(22.77%), and transportation (16.25%). Natural gas is consumed for both
energy (60.68%) and non-energy (39.32%) related uses.
Foreign Trade
India is the second biggest oil importer after China and is highly
dependent on imported crude oil.[4] The net imports of crude oil rose from
132.78 MTs during 2008–09 to 220.43 MTs during 2017–18. Despite the
dependence on imports, India has developed sufficient processing capacity
over the years to produce different petroleum products. As result, India is
now a net exporter of petroleum products. The export of petroleum
products increased from 38.94 MT in 2008–09 to 66.83 MT during 2017–
18. The import of petroleum products was 35.46 MT in 2017–18,
decreasing by 2.28% from the previous fiscal. The gross import of natural
gas increased from 8.06 BCM in 2008–09 to 19.87 BCM in 2017–18,
recording a CAGR of 9.44%.
India has an 82.8% import dependence for crude oil and 45.3% for natural
gas/LNG. The net foreign exchange outgo is 63.305 billion US$ in the
financial year 2017–18 on account of crude oil imports. India generated
35.2 million tons of petroleum products from indigenous crude oil
production whereas the consumption of petroleum products is 204.9
million tons. Similarly India generated 31.7 bcm natural gas locally
against the consumption of 58.1 bcm.
Thus, the petroleum industry has to depend too much on the imported
crude. Due to the increasing volume of demand-supply gap, the petroleum
refineries in India have failed to utilise their production capacity fully.
3. Price Hike:
The international prices of petroleum goods have been maintaining a
constant hike since 1973-74. This has led to the excessive rise in our
import bill on petroleum goods. In 2011-12, total import bill on petroleum
oil and lubricants was to the tune of Rs 7, 43,075 crore as against Rs 5,587
crore in 1980-81.
The country has now increasingly facing the growing demand-supply gap
of petroleum crude. The country has also been facing the problem of
mounting import bill of POL items. Under the present circumstances, it is
quite urgent to intensify the exploration activities of the oil sector
sincerely.
6. Technical Problems:
The petroleum industry of the country is also suffering from numerous
technical problems in respect of production of middle distillates,
activating its fire fighting systems etc. which need to be corrected and
updated at the earliest possible time. The RD facilities in the industry
should be expanded with the maximum possible limit to face these
technical problems.
7. Pollution:
The growing pollution near the refineries and oil fields is a big problem
for the industry. The Government is trying to control such pollution by
adopting certain effective measures.
: Wikipedia, YouTube,
Books: Indian Economy
AN Aggarwal