It was also envisaged that by 2030, the import dependence should be halved. However, the dependence has been growing since and it stood at 83.7% in 2018-19,
A group of ministers, headed by home minister Amit Shah, on Tuesday discussed the possible steps to boost the oil and gas output. According to a government official, “The ministers reviewed and discussed technical issues relating to investments in India and abroad by Indian oil companies.”
The meeting held in the wake of Indian oil companies looking for alternative sources of crude oil as the country has stopped oil imports from Iran following US sanctions. Iran was the third-largest supplier of crude oil to India till last financial year.
The India crude oil basket moderated to $61.03 per barrel on June 3, compared with the average of $70.2 during May. According to India Ratings and Research, while ongoing production constraints in Venezuela and the final stance taken by the US on Iran and Venezuela sanctions could counter the impact of higher shale oil production, “a relatively balanced demand-supply position could lead to an overall reduction in crude price volatility in FY20.”
The GoM comprises finance minister Nirmala Sitharaman, commerce and railway minister Piyush Goyal, external affairs minister S Jaishankar and petroleum and steel minister Dharmendra Pradhan.
Prime Minister Narendra Modi had in 2015 said the country requires to bring down its oil import dependence from 77% in 2013-14 to 67% by 2022, India’s 75th year of independence. It was also envisaged that by 2030, the import dependence should be halved. However, the dependence has been growing since and it stood at 83.7% in 2018-19, according to data by the ministry’s Petroleum Planning and Analysis Cell (PPAC).
India’s demand for oil grew 2.6% to 211.6 million tonne in 2018-19, whereas the crude oil output has been falling. It was down to 34.2 million tonne in 2018-19, compared with 35.7 million tonne in 2017-18, as per the PPAC.
The fall in domestic production is despite an increased focus to augment domestic production through changes in policy. The New Exploration Licensing Policy was replaced by the Hydrocarbon Exploration and Licensing Policy which provides pricing and marketing freedom in order to attract more investments. However, the policy change is yet to show results.
An increased oil import bill increases trade deficit. According to the PPAC, India spent $111.9 billion on oil imports in 2018-19, compared with $87.8 billion in the previous year.