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India’s dependence on imported crude oil increased at a time when the price of crude oil was sky-high all over the world
Far from meeting the target given by the Prime Minister to increase self-sufficiency in crude oil, on the contrary, the dependence on imported crude oil has increased from 77 percent to over 87 percent
About eight years ago, at the Global Energy Summit in 2015, Prime Minister Narendra Modi had said that by 2022 India should reduce its dependence on imported crude oil by 10 percent.
Continuous rise
At that time, India was importing about 77 percent of its oil requirement. The target set by Prime Minister Narendra Modi to increase self-reliance in the matter of crude oil is far from being fulfilled; on the contrary, the dependence on imported crude oil has increased from 77 per cent to more than 87 per cent. If you look at the figures of the Petroleum Planning Analytical Cell i.e., PPAC, a unit of the Union Ministry of Petroleum, the share of imported crude oil in the total crude oil consumed in the country during the financial year 2022-23 has been recorded at 87.3 percent, which is a record level so far. The share of imported crude oil had not reached this level in any financial year before 2022-23.
India’s dependence on imported crude oil increased at a time when the price of crude oil was sky-high all over the world. During the financial year 2022-23, crude oil prices in the global market have touched $130. Due to its heavy dependence on imported crude, India had to import crude oil at an expensive price. As a result, the cost of valuable foreign exchange reserves for imports has increased.
As a matter of fact, no work has been done on the discovery of new oil fields in the country for a long time and the extraction of oil from the discovered oil fields has not started. Government companies like ONGC and Oil India are still extracting oil from the existing oil fields because of which oil reserves are on a continuous decline. The downward trajectory of the domestic crude oil production led to the increased demand for imported crude oil.
However, experts believe that during the financial year 2022-23, India imported crude oil from Russia at much cheaper rates. Indian companies banked on cheap oil from prices and imported heavily, and as a result, crude oil imports surged in the country. Moreover, the demand for crude oil was on the rise with the economy finally opening after Corona. High demand also led to increased crude imports.