Description
India's Dependency on oil, Demand (present and future), Oil shock and how to manage it, Government policies, special emphasis on energy policy.
Energy policy of India.
Points covered…
?
? ? ?
?
Dependency on oil. Demand (present and future). Oil shock and how to manage it. Government policies, special emphasis on energy policy 2007 What should be done?
Dependency on oil
? ? ? ? ?
80-95% of all transport is fuelled by oil products All petrochemicals are produced from oil 99% of all lubrication is done with oil products 95% of all goods in the shops get there using oil 99% of our food involves oil or gas for fertilisers, agrochemicals, tilling, cultivation and transport
Demand of oil growing steeply
?
?
?
? ?
?
Demand growth has been very strong More of world population are consumers Supply is tight and straining to keep up There is virtually no spare capacity New capacity takes a lot of time The economists tell us there’s no problem
Future demand of oil
?
?
?
?
Economics requires that supply and demand always balance Economists encourage us to believe that supply will expand to meet demand If supply can’t expand we need high prices to ‘destroy demand’ How high do prices need to go?
Consumption of oil around the globe
Oil Shock: Threat & Opportunity
?
Every oil shock presents opportunity for fresh thinking on energy policy. 1973/74 and 1979/80 oil shocks initiated action on different fronts not too distant gulf war in the year 1990 was responsible for petroleum price escalating. Current episode is no exception even though there is no visible crisis. With China and India emerging as major oil importers, downward pressure on oil prices will get mitigated. Clearly, our response has to go beyond merely increasing consumer prices.
?
?
Managing the Oil Shock
?
Macro-economically, India is comfortable. Forex reserves are over $ 200 billion, dollar earnings through exports and through capital inflows are buoyant. One view is that 8% growth will take care of oil shock. There is, in any case, no visible crisis like in 1973/74, 1979/80 and 1990/91.And India has also emerged as major oil product exporter. In 04/05, product exports 20% of crude imports.
?
What does government say
?
The UPA government will immediately put in place policies to enhance the country’s energy security, particularly in the area of oil. Overseas investments in the hydrocarbon industry will be actively encouraged. An integrated energy policy linked to sustainable development will be put in place.
Government policies
?
Refining sector – delicensed Marketing of Petroleum Products policy
? Investment of Rs 2000 crore in infrastructure allows marketing of transport fuels ? FDI - 100% allowed
?
Energy Policy 2007
?
Main stress in this presentation is escalating global oil prices. In March 2002 it was $ 23 a barrel. In August 2005, it was $ 63 a barrel. And lately it crossed $ 140 a barrel.
India imports over 70% of crude oil requirements, a proportion that could well increase. We all remember the hue and cry which occur when government last increased the fuel prices
?
?
What has been done so far
?
?
?
Energy security aspect of CMP commitment being emphasised in significant measure, although only from oil and gas point of view. Active diplomacy to secure new supplies of oil and natural gas through equity investments abroad and pipelines. Intensified domestic exploration. Now need to focus on integrated energy policy aspect of CMP commitment.
What Next?
?
Public sector will continue to play vital role in energy supply. Energy PSUs need massive professionalisation and strengthening.
Potential for public-private partnerships also need to be explored in specific areas. But for full-time focus on integrated energy policy and technology development key gap is institutional.
?
?
Finally
?
No doubt commercial energy use has to grow (India is half of China in terms of energy consumption) but there is a role for demand management. Energy conservation and efficiency is not the same as energy denial.
?
Somewhere, we have to think of decreasing our dependency on import of energy . Government has to set an example. We should think in terms of implementing effective policies so that our increase in consumption should match our growing demand.
References
?
?
? ?
Business today www.petroleum.nic.in www.hindustanperoleum.com www.ongcindia.com
Any questions
.
doc_869702039.pptx
India's Dependency on oil, Demand (present and future), Oil shock and how to manage it, Government policies, special emphasis on energy policy.
Energy policy of India.
Points covered…
?
? ? ?
?
Dependency on oil. Demand (present and future). Oil shock and how to manage it. Government policies, special emphasis on energy policy 2007 What should be done?
Dependency on oil
? ? ? ? ?
80-95% of all transport is fuelled by oil products All petrochemicals are produced from oil 99% of all lubrication is done with oil products 95% of all goods in the shops get there using oil 99% of our food involves oil or gas for fertilisers, agrochemicals, tilling, cultivation and transport
Demand of oil growing steeply
?
?
?
? ?
?
Demand growth has been very strong More of world population are consumers Supply is tight and straining to keep up There is virtually no spare capacity New capacity takes a lot of time The economists tell us there’s no problem
Future demand of oil
?
?
?
?
Economics requires that supply and demand always balance Economists encourage us to believe that supply will expand to meet demand If supply can’t expand we need high prices to ‘destroy demand’ How high do prices need to go?
Consumption of oil around the globe
Oil Shock: Threat & Opportunity
?
Every oil shock presents opportunity for fresh thinking on energy policy. 1973/74 and 1979/80 oil shocks initiated action on different fronts not too distant gulf war in the year 1990 was responsible for petroleum price escalating. Current episode is no exception even though there is no visible crisis. With China and India emerging as major oil importers, downward pressure on oil prices will get mitigated. Clearly, our response has to go beyond merely increasing consumer prices.
?
?
Managing the Oil Shock
?
Macro-economically, India is comfortable. Forex reserves are over $ 200 billion, dollar earnings through exports and through capital inflows are buoyant. One view is that 8% growth will take care of oil shock. There is, in any case, no visible crisis like in 1973/74, 1979/80 and 1990/91.And India has also emerged as major oil product exporter. In 04/05, product exports 20% of crude imports.
?
What does government say
?
The UPA government will immediately put in place policies to enhance the country’s energy security, particularly in the area of oil. Overseas investments in the hydrocarbon industry will be actively encouraged. An integrated energy policy linked to sustainable development will be put in place.
Government policies
?
Refining sector – delicensed Marketing of Petroleum Products policy
? Investment of Rs 2000 crore in infrastructure allows marketing of transport fuels ? FDI - 100% allowed
?
Energy Policy 2007
?
Main stress in this presentation is escalating global oil prices. In March 2002 it was $ 23 a barrel. In August 2005, it was $ 63 a barrel. And lately it crossed $ 140 a barrel.
India imports over 70% of crude oil requirements, a proportion that could well increase. We all remember the hue and cry which occur when government last increased the fuel prices
?
?
What has been done so far
?
?
?
Energy security aspect of CMP commitment being emphasised in significant measure, although only from oil and gas point of view. Active diplomacy to secure new supplies of oil and natural gas through equity investments abroad and pipelines. Intensified domestic exploration. Now need to focus on integrated energy policy aspect of CMP commitment.
What Next?
?
Public sector will continue to play vital role in energy supply. Energy PSUs need massive professionalisation and strengthening.
Potential for public-private partnerships also need to be explored in specific areas. But for full-time focus on integrated energy policy and technology development key gap is institutional.
?
?
Finally
?
No doubt commercial energy use has to grow (India is half of China in terms of energy consumption) but there is a role for demand management. Energy conservation and efficiency is not the same as energy denial.
?
Somewhere, we have to think of decreasing our dependency on import of energy . Government has to set an example. We should think in terms of implementing effective policies so that our increase in consumption should match our growing demand.
References
?
?
? ?
Business today www.petroleum.nic.in www.hindustanperoleum.com www.ongcindia.com
Any questions
.
doc_869702039.pptx