Transforming Energy

India wants to set up a gas exchange to promote alternative energy and fast-track oil import reduction.

- Anilesh S. Mahajan

Cutting down oil imports to around 67 per cent in the next five years, India plans to develop its own gas exchange to push consumption of alternative fuel – be it indigenous or imported – on the lines of America’s Henry Hub or the United Kingdom’s Balancing Point. To make up for the cuts in oil imports, the nation will have to make a concerted effort to transit to electricity and natural gas usage in all sectors.

Prime Minister Narendra Modi met heads of national and international oil and gas companies last week to attract investments to this end, armed with a presentation by the Niti Aayog – the nation’s official think tank - on India’s plans to move to alternative fuel. Though the Organisation of Petroleum Exporting Companies (OPEC) predicts that India’s oil consumption is likely to peak to 10.1 million barrels daily by 2040 – as against today’s four million barrels – New Delhi predicts a major peak as early as 2023/24, before the demand goes down.

Both OPEC and the International Energy Agency – IEA the oil buyers’ group — aren’t quite convinced that India can reduce oil imports. On the contrary, they predict a climb to over 90 per cent predicting that growth in freight movement, chemical manufacturing, aviation and industries will lead to a continued and enhanced demand for oil.