GS Paper III

News excerpt

As per Petroleum Planning and Analysis Cell (PPAC), in November, India exported more refined petroleum, with a 32.1% increase compared to the same month last year.

More details on news:

•  The boost in export continued from April to November, mainly because of higher shipments of different oil products such as rise in the outbound shipment of vacuum gas oil (VGO), motor-spirit (MS), and aviation turbine fuel (ATF).
• While India imported less crude oil in November, Russia remained a major supplier. Discounts on Russian oil helped keep import volumes stable.
•  India also imported more processed petroleum products. On the home front, people used slightly less petroleum products in November, but overall usage from April to November went up.
•  The country's natural gas consumption increased, and its production also saw a rise. Indian refineries processed more crude oil, showing a 10.7% increase from November 2022.
•   Ethanol blending with petrol for November 2023 was recorded at 10.24%, during the first month of the Ethanol Supply Year (ESY) 2023-24, marginally lower than the 12.06% blending rate during the ESY December 2022- October 2023.
• Despite some fluctuations, India's oil and gas sector remains active and plays a crucial role in the country's economic activities.

India's reliance on imported crude oil is deepening

•  The PPAC data indicated that India's reliance on imported crude oil is deepening.
• The country's self-sufficiency in petroleum products declined to 11.5% in November from 13.1% in the same month a year earlier.
•  Correspondingly, crude oil imports surged to 232.7 MMT in the fiscal year 2022-23 from 212.4 MMT in the previous year, indicating a growing import bill amid efforts to manage inflation.

State of petroleum refinery in India

• India has witnessed a spectacular growth in the refining sector over the years.
• From a deficit scenario in 2001, the country achieved self-sufficiency in Refining and today is a major exporter of Quality Petroleum Products.
• The petroleum products exported from India amounted to approximately 45.7 million metric tons until December of the fiscal year 2023.
• Today India is the global refining hub with refining capacity of 248.9 MMTPA and is the fourth largest in the world after the United States, China and Russia.
• There are total 23 refineries in the country, 18 in the Public Sector, 2 in the Joint Venture and 3 in the Private Sector well spread geographically and connected with cross country pipelines.

Oil & Gas Industry in India:

Steps taken to reduce dependence on imported crude oil

•  To reduce the country's dependence on imported crude oil, the government has adopted a five-pronged strategy, including:
  •       Increasing domestic production of oil and gas
  •       Promoting energy efficiency and conservation measures
  •       Emphasizing demand substitution,
  •       Promoting biofuels and other alternate fuels/renewables
  •       Implementing refinery process improvements.
•  In addition, the government launched the National Biofuel Policy in 2018 to promote the use of alternative clean fuels like ethanol, bio-diesel, and bio-CNG.
• Ethanol blending in petrol during the Ethanol Supply Year (ESY) is estimated to have had an impact of over Rs. 22,600 crore on the import bill of crude oil and petroleum products. 
•  The National Policy on Biofuels -2018 as amended targets 20% blending of ethanol in petrol by ESY 2025-26.
•  Public sector OMCs have already achieved over 10% ethanol blending in petrol . The sale of E-20 (20% ethanol blended petrol) fuel has also been launched in February 2023.

Conclusion

Despite India's rising refined petroleum exports, the deepening reliance on imported crude oil calls for sustained efforts. The government's five-pronged strategy, including increased domestic production and promoting biofuels, must be diligently pursued to enhance energy security and reduce the trade imbalance, ensuring a sustainable and resilient energy future.

Mains PYQ

Q. Petroleum refineries are not necessarily located nearer to crude oil producing areas, particularly in many of the developing countries. Explain its implications. (UPSC 2017)