Oiling wheels of change

Discounted sales from Russia are reported to have reduced India's annual oil import bill from $157 billion to $132 billion last year.

- RANJAN MATHAI

Our trade deficit and inflationary pressures will, however, persist as global oil prices are expected to remain elevated. Being projected as the world's largest source of incremental oil imports in the years ahead thus seems a dubious distinction.

Data for financial year 2023-24 showed yet another decline in domestic crude oil production to 29 million tonnes (mt), or about 600,000 barrels per day (bpd), while imports at 232 mt stayed at 87 per cent of total requirements. This dismal scenario-a4 per cent decline per year since 2018 is set to continue, according to the International Energy Agency. In its February 2024 report (Indian Oil Market Outlook to 2030), the IEA projected that India's oil production may fall to 540,000 bpd in 2030, while oil demand would rise to 6.6 million bpd "with major implications for India's security of supply". Dependence on foreign supplies would then be well over 90 per cent! It would be even higher, if not for India's praiseworthy schemes to promote electric vehicles, biofuels, and other alternatives.

Change may, however, be on the horizon with the Minister for Petroleum and Natural Gas (MOPNG), Hardeep Puri, recently announcing the formation of a Joint Working Group to promote ease of doing business in exploration & production (E&P). This group includes both private and public sector companies active in E&P operations, as well as the MoPNG and the DirectorateGeneral of Hydrocarbons.