The declining trend in domestic oil and gas output resulting in higher imports is putting pressure on producers such as Reliance Industries, ONGC, Cairn, and Oil India to produce more to meet the growing demand.

Domestic oil production in the April-June quarter declined 1.4 per cent against the same period last year, while natural gas production dipped 17.6 per cent year-on-year. In June, crude oil output dropped marginally by 0.6 per cent year-on-year.

For past two years, domestic gas output has been falling. The output in June fell 16.7 per cent, mainly due to unexpected production declines in the country’s largest gas fields in the East Coast operated by Reliance Industries.

Moily push

Petroleum and Natural Gas Minister M. Veerappa Moily has been stressing the need to vigorously implement new exploration programme to unlock hydrocarbon resources. The Minister has been maintaining that “we cannot continue with rising imports and declining gas production.”

Moily is hopeful that the crude oil production will rebound this fiscal to over 39 million tonne from about 37.89 million tonne in 2012-13.

India, at present, imports about 73 per cent of its energy needs. Over the years, the country’s dependence on oil imports has only increased. In June imports stood at 13.759 million tonne. Crude oil output in June was affected by natural decline in the producing fields, as also by external factors like the recent bandhs and blockades in Assam.

According to Petroleum Planning & Analysis Cell (PPAC) data, the petroleum product demand during June dipped marginally.

To cater to the growing demand, the refiners turned 2.3 per cent more crude oil into fuel during the month under review against June 2012. This was less than the annual growth registered in May mainly because some refineries were shut for maintenance.

The Petroleum Ministry data included estimated crude processed by Reliance Industries’ export-oriented refinery in Jamnagar. Reliance’s two refineries at Jamnagar account for about 30 per cent of the country's refining capacity.

According to PPAC, the consumption estimates represent the market demand and is aggregate of sales by oil companies in domestic market and consumption through direct imports by private parties.

While the data for company sales were actual that of private direct imports are estimated, it said.

richa.mishra@thehindu.co.in