India’s reliance on imported crude inched up to 88.3 per cent in April-June from 86.5 per cent a year ago as consumption of fuels and other petroleum products rose while domestic oil production declined slightly, as per data released by the Petroleum Planning & Analysis Cell (PPAC) of the oil ministry. The reliance on imported crude in the first quarter (Q1) of the current financial year (FY24) was also higher than the previous fiscal’s 87.4 per cent–the highest-ever for a full year.
While the government wants to reduce India’s high dependency on imported crude oil, sluggish domestic oil output in the face of continually growing domestic demand has been the biggest obstacle. In early 2015, the government had set a target to reduce reliance on oil imports to 67 per cent by 2022 from 77 per cent in 2013-14, but the dependence has only grown. Heavy reliance on imported crude oil makes the Indian economy vulnerable to global oil price volatility, apart from having a bearing on the country’s foreign trade deficit, foreign exchange reserves, rupee’s exchange rate, and inflation.
This story is subscriber only!
Now subscribe at a special Republic Day offer of Rs 75/month.
Subscribe Now
Already a subscriber? Sign in