India’s crude Oil demand
- August 19, 2024
- Posted by: OptimizeIAS Team
- Category: DPN Topics
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India’s crude Oil demand
Sub: Eco
Sec: External Sector
- Rising Oil Import Dependency:
- India’s reliance on imported crude oil has increased to 88.3% in the first four months of FY25 (April-July 2024).
- This is up from 87.8% during the same period last year.
- Domestic Oil Production vs. Demand:
- Despite efforts to boost domestic production, India’s self-sufficiency in crude oil has declined to 11.7%.
- Domestic crude oil production was 9.5 million tonnes, while total domestic consumption of petroleum products rose to 80.9 million tonnes.
- Impact on the Economy:
- High import dependency makes India vulnerable to global oil price volatility, affecting the trade deficit, foreign exchange reserves, and inflation.
- The gross oil import bill for April-July 2024 increased by 17% year-on-year to $49 billion.
- Government’s Efforts and Challenges:
- The government had set a target in 2015 to reduce oil import dependency to 67% by 2022, but this goal has not been met, and the dependency has grown instead.
- Efforts to reduce reliance on imported oil include promoting electric mobility, biofuels, and incentivizing domestic oil exploration and production.
- However, these measures have not been sufficient to offset the growing demand for petroleum products.
- Continued Demand Growth:
- India’s domestic consumption of petroleum products rose by 4.8% year-on-year, reflecting strong demand, particularly for transportation fuels like petrol and diesel.
- Significance of the Issue:
- The continuous increase in oil import dependency is a significant concern for India’s energy security and economic stability.