In 2011-12 India depended on foreign crude oil to meet 83.5 per cent of its refinery requirement. However, in terms of domestic consumption of petroleum products, the dependence was significantly lower, at 76 per cent, as per Petroleum Planning and Analysis Cell (PPAC) data.

The divergence between the oil import dependence figures based on the refinery requirement of crude oil and domestic consumption of petroleum products highlights that not all the crude oil imported by the country is consumed domestically.

This is because a significant quantity is shipped back overseas after value addition. This explains the lower dependence in terms of domestic consumption vis-à-vis refinery requirements.

Petroleum products account for a sizeable chunk of India’s exports in value terms. India exports petroleum products such as petrol, naphtha, diesel, fuel oil, vacuum gas oil and aviation turbine fuel, but also imports diesel and naphtha, besides LPG.

In terms of the refinery requirement of crude oil, India’s dependence on foreign crude has risen nearly 3 percentage points since 2007-08. The PPAC data show that the quantum of both indigenous and imported crude utilised by Indian refineries has risen by 35.8 per cent since 2007-08 to 204.8 million tonnes in 2011-12. Import dependence based on refinery requirements during the past five years was at a high of 85.4 per cent in 2009-10.

In contrast, oil import dependence based on domestic consumption of petroleum products has risen just 1 per cent during the last five years. This can be partly attributed to higher production of crude oil in each consecutive year of the five-year period. But rising consumption has resulted in a decline in India’s self-sufficiency —– in terms of the percentage of domestic demand met through products generated from indigenous crude — from 25.1 per cent in 2007-08 to 24.1 per cent in 2011-12.

> arvind.jayaram@thehindu.co.in

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