Scoping Study for an Energy Security Model for India
The share of oil in the country's fuel mix has steadily risen from 25% in 1960s to about 33% in the 1990s. Though the energy elasticity is projected to decline to 0.55 in 2025 from the present 0.70, the share of oil in overall energy availability is projected to increase to 40% over the same period.
Since our domestic production has failed to keep pace with this rapid rate of growth, our import dependence for oil has risen from 44% in 1991 to over 70% in 2001. The bulk of the imports of oil products are crude oil imports. In 2001/02, 79 million tonnes of crude oil was imported, out of which 55 million tonnes was sour, and the rest was sweet. Of the 19 million tonnes, sweet crude, 65% was imported from Nigeria. Sour crude is largely imported from the Saudi Arabia, though some private refineries have started to take crude from countries as far as Venezuela. The 10th Five Year Plan forecasts an import dependency of 85% by 2006/7 out of which sour crude will be 78% largely sourced from Middle East.
No other commodity, which is traded on the same scale, is exposed to as much supply risk as oil. Regular price shocks, political tensions in the major oil producing region of the world - Middle East - , and even variations in weather in one country can disrupt the oil supplies and hence the economy of some other country. Hence, the countries that are heavily dependent on oil imports need to institute mechanisms in place to ensure the timely availability of oil for their economy. Policies, strategies, and agencies set up to mitigate energy security concerns, in turn, need to be complemented by knowledge structures and analytical tools that allow identification of appropriate mitigation and coping strategies.
Since our domestic production has failed to keep pace with this rapid rate of growth, our import dependence for oil has risen from 44% in 1991 to over 70% in 2001. The bulk of the imports of oil products are crude oil imports. In 2001/02, 79 million tonnes of crude oil was imported, out of which 55 million tonnes was sour, and the rest was sweet. Of the 19 million tonnes, sweet crude, 65% was imported from Nigeria. Sour crude is largely imported from the Saudi Arabia, though some private refineries have started to take crude from countries as far as Venezuela. The 10th Five Year Plan forecasts an import dependency of 85% by 2006/7 out of which sour crude will be 78% largely sourced from Middle East.
No other commodity, which is traded on the same scale, is exposed to as much supply risk as oil. Regular price shocks, political tensions in the major oil producing region of the world - Middle East - , and even variations in weather in one country can disrupt the oil supplies and hence the economy of some other country. Hence, the countries that are heavily dependent on oil imports need to institute mechanisms in place to ensure the timely availability of oil for their economy. Policies, strategies, and agencies set up to mitigate energy security concerns, in turn, need to be complemented by knowledge structures and analytical tools that allow identification of appropriate mitigation and coping strategies.