Fears of spiralling oil prices and energy crisis loom large as western forces continued their onslaught on Libya for the third day on Tuesday.
RS Sharma, former chairman ONGC, told FE, ?The situation is very grave for India, because our vulnerability is perhaps the highest as we are heavily dependent on imports.?
Former IOC chairman Sarthak Behuria agrees. ?The current situation in Libya and the Arab world will have an impact on the oil prices. India will be obviously impacted,? he said.
While India imports oil from Libya, recently OIL and its partner IOC have decided to relinquish their onshore oil blocks in the country despite establishing presence of oil in the blocks. Libya is the world?s 17th largest oil producer and third largest in Africa. But two-thirds or more of that output is already thought to have vanished.
Upendra Das, senior fellow at the Research and Information System for Developing Countries said, ?Though the situation is political in nature, from an economic point of view such differences should lead to polarisation.? The situation in the region will impact the oil prices resulting in inflation. Therefore it is important that different parts of the world should discuss the situation as this will impact several sectors including agriculture goods, transportation etc.,?he pointed out.
However, according to Subodh Kumar Jain, director, South Asia Gas Enterprise, ?The Libyan crisis should not directly impact India on the Crude Oil and Natural Gas front, as the volume of crude production was quite low. Moreover, India was not buying crude from Libya , Yemen or Syria in a big way.?
According to Jain, while the oil price rise is due to speculators, no doubt there is some effects on Indian contractors like Punj Lloyds (in Libya) or Indian factories in Egypt. It may also affect Cos like Oil India, ONGC etc.