Domestic oil production has contracted this year, increasing the country’s dependence on imports and making it more vulnerable to soaring crude prices.
Local output declined 3.3% from a year earlier to 14.6 million metric tonnes in the April-August period this year, raising dependence on imports for 83.2% of the country’s oil requirement.
India’s domestic crude oil output has stagnated or declined for more than seven years because of lower production from ageing fields, suboptimal oilfield management and policy issues. A straight decline since 2011-12 has pushed up country’s import dependence in six years to 83.2% from 75.6%, a trend that runs counter to Prime Minister Narendra Modi’s plan of cutting import dependence by 10% to 68% by 2022.
India paid $88 billion for importing crude in 2017-18. Having already spent $49 billion on oil imports in the April-August period, Indian refiners are set to fork out much more this year with crude touching $85 a barrel. Read more
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