High Level Committee recommends strategy to reduce import dependency of crude oil

Speed Post News Network

New Delhi : The High-Level Committee (HLC), constituted by the Government of India to examine the issues relating to preparation of action plan to create synergy among R&D Centres of Oil & Gas PSUs; tax issues, and ways to benefit from GST by the Oil & Gas PSUs, on May 21, 2019, submitted its report to the Minister for Petroleum & Natural Gas and Skill Development & Entrepreneurship Dharmendra Pradhan here.

The HLC comprising Dr  Anil Kakodkar, eminent Scientist, and Sidharth Pradhan, an expert on financial and tax issues, also looked into merger, acquisition and consolidation of Oil & Gas PSUs and the Joint Ventures; explored the need and possibility of formation of new entity dealing with oil services and supply of qualified manpower to Oil & Gas sector around the world.

Energy security is a key strategic priority for India. In 2018, India consumed 204.92 MMT petroleum products and 58.64 Billion Cubic Metre (BCM) natural gas whereas the domestic production of crude oil and natural gas has almost stagnated. The import dependency of crude oil and LNG during the year was 82.59% and 45.89% respectively which is likely to increase in days to come. During 2018, petroleum import (Rs 7028.37 billion) was 23.42% of total gross import (Rs 30010.2 billion) of the nation.

India’s projected oil demand is going to grow at Compound Annual Growth Rate (CAGR) of 4% during 2016-2030 against the world average of 1% though the projected oil demand will be much lower as compared to the US and China. India is thus at very precarious situation and to secure its energy needs in sustainable manner, out-of-box solutions are needed. R&D is going to play an important role in the process.

The HLC, in the process, visited different R&D and training institutes of different oil & gas PSUs. It also engaged with CMDs/ senior executives of the Oil sector to understand the business, challenges and opportunities in the sector before writing its recommendations. The Committee has recommended short term, medium term, and long term strategies in the report, clearly bringing out the strategy to reduce the import dependency of the nation, according to a PIB release.