A further rise in oil imports will only add to the deficit if India itself doesn’t produce sufficient oil.
India’s oil demand is expected to surge at a much faster rate than its peer China in the next five years. India is one of the biggest oil-importing nations as it largely depends on imports to fulfill its domestic oil requirement. However, a further rise in oil imports may substantially add to the deficit if the country itself doesn’t produce sufficient oil. The total primary energy in the country is projected to increase from 233 MT in 2018 to 305 MT in 2025, whereas China’s oil demand is projected to increase from 593 MT in 2018 to 672 MT in 2025, said the Ministry of Petroleum & Natural Gas citing International Energy Agency.
To reduce the crude oil imports, the government has started to take steps such as enhancing the exploration & production of oil and gas, giving thrust on demand substitution, and promoting energy efficiency and conservation. Various initiatives such as the Policy for relaxations, extensions and clarifications under the Production Sharing Contract (PSC) regime for early monetization of hydrocarbon discoveries, Discovered Small Field Policy, Hydrocarbon Exploration and Licensing Policy, have also been proposed to increase the domestic production of oil and gas in India.
Looking at the estimates of a significant increase in oil consumption in India, the government today said that Oil PSUs and Joint Venture refineries have plans for capacity addition including investment in greenfield refineries. The refining capacity is expected to increase from 249.4 MMTPA at present, to about 443 MMTPA by 2030.
Even as the Modi government has set a target to achieve 175 GW green energy capacity by 2022, the efficiency of green energy has not reached anywhere near the conventional fuels. Thus, to meet the incremental demand of petrol and diesel, refineries also have the capacity expansion or upgradation plan including for the supply of BS-VI quality petrol and diesel.