India replaced US to become world 2rd largest Oil Importer

Increasing population, thriving auto sector and high rate of economic growth have fuelled the oil
demand to a record high of 5.19 million bpd. Oil and oil products import now accounts for 97.2% of
total energy import bill amounting US $61843x10
6
.Growing indian population which is now stand at
1315x10
6
,spurring urbanisation of nearly 43% of indian population and the growth in GDP & its
structural changes accompanied by rising per capita income have driven the oil consumption to a
record high level. Domestic oil production also reached its peak limit of 50x10
6
ton but only
contributing 10% of countrys energy demand. Even the domestic demand for non-energy uses.e.g
feedstock, industrial consumable (grease, wax, and lubricants), bituminous carpeting, petroleum by
product industries are also experiencing a huge consumption of crude oil. Only China is now ahead of
India with oil demand of 15.70 million bpd. These trends in fossil fuel demand are likely to continue in
coming years due to the better prospect of Indian economy and changing lifestyle of Indians. As a
reason of that, Indian economy thus becomes more dependent on the vagaries of international
market. Economists suggested that Goverment must consider the concern of current account deficit
and limited domestic oil resources and should scout for oil acreages overseas to keep the momentum
in the economic growth and provide safeguard against any supply disruption.
However, as a precautionary measure, Government has taken certain steps in this respect.
India Strategic Petroleum Reserves Ltd (ISPRL) has been asked to build 50 more underground
strategic oil reserves of capacity of 6 million ton each. These would add on to their existing capacity of
18 reservoirs. These stockpiles would be used to buy and store oil when prices are low and release
them to the refiners when there is a spike in global oil rates and act as a insurance against any supply
interruption. Oil Industry Development Board (OIDB) in consortium with state run Oil companies would
provide the entire funding of the projects which is estimated at Rs,40000.Initiatives have also been
taken to shore up the production in the domestic shale gas industry. India believe to have a reserve of
96 trillion cubic feet (tcf) recoverable shale gas of which only 15% is being utilised now.This stock
could meet indias energy demand for next 20 years. India is eager to bring in global energy expertise
to help it unlock resources and cut import dependency. It has linked the local gas prices to global
indexes in an effort to incentivise and attract producers and importers. It has planned to allow the
multinationals for equity participation in these shale gas blocks which will create interest among
foreign oil giants who in turn boosting up the investment in this sector.