A fall in domestic crude oil output has resulted in Indian refiners importing 15.944 million tonnes of oil in July against 14.594 million tonnes in the same month last year. Domestic oil production dropped by 2.3 per cent in July annualised, according to data released by the Ministry for Petroleum & Natural Gas.
India is among the largest energy consumers in the world along with the US, China and Russia. The country meets over 75 per cent of its crude oil requirement through imports.
Given the limited domestic availability of oil and gas, that constitutes almost 40 per cent of the energy basket, India is compelled to import a significant portion of its requirement in a volatile international price scenario. In July, Indian refiners bought crude oil at $104.86 a barrel.
The country’s refining capacity stood at 215 million tonnes per annum as on April 1, 2013, up 68.87 per cent since 2004-05. It is further projected to go up to 264.966 million tonnes by 2015-16, which means that refiners will have to depend more on crude imports to run the plants.
Petroleum & Natural Gas Minister M. Veerappa Moily has been stressing on increasing domestic production. “We have to vigorously implement new exploration programmes across the country as a lot of our prognosticated hydrocarbon resources are yet to be unlocked,” Moily said.
Domestic oil production in July dropped by 2.3 per cent annually due mainly to a significant drop in output from the Oil India fields in Assam because of bandhs and blockades. Oil India’s output fell by 7.5 per cent year-on-year.
ONGC produced 1.9 per cent less during the month as output from most of its onshore and offshore fields fell.
To cater to the growing demand for petroleum products refiners turned 5.1 per cent more crude oil into fuel during the month under review against that in the same month in the previous year.
The country’s natural gas production continued its declining trend in July and fell by 16.1 per cent year-on-year during the month. For the past two years domestic gas output has fallen due mainly to the unexpected production declines in the country’s largest gas fields operated by Reliance Industries Ltd on the East coast.