India is hosting the 13th edition of PETROTECH in 2019
- India has an energy consumption need of 1921 million tonnes by 2040.
- It is presently consuming about 7224 million tonnes
- The country share of global energy demand which is likely to increase by 11% by 2040 was 11% in 2016.
- India is an energy demanding economy
- The government has taken a lot of initiatives like Pradhan Mantri Awas Yojana, Smart Cities Mission etc which focusses on the energy sector.
- The last PETROTECH Conference in December 2016 mentioned about four pillars for India’s energy future – energy access, energy efficiency, energy sustainability and energy security.
- Energy justice is also a key objective and now a top priority for India. It means providing energy to the common man with all the facilities.
- India has the largest demand of energy after U.S. and China.
- India imports 80% of its crude oil from outside. Hence India has a say in negotiating its terms in terms of credit lines, pricing and other factors.
- India is seen as a potential market for future due to the large number of development projects being undertaken and its GDP growth which was 7.4% in 2018 and is expected to move higher.
Factors involved in pricing
- When exporters resort to arm twisting techniques like threatening to reduce the supply of oil in the international market, oil prices will rise.
- This was seen during the time when OPEC threatened to cut the supply of oil in the market and the move was supported by the U.S.
- The sanctions on Iran by the U.S. also raised the crude oil prices in the international market.
- PM announced that India is the fourth largest refiner in the world.
- India purchases crude oil from the international market to refine it to produce petrol and diesel.
- The prices of crude oil are determined by the oil cartel, OPEC and the U.S.
- As the government has deregulated the prices of crude oil, the prices of the same are determined by the prices in the international market.
- It provides LPG connections to poor households
- It helps in saving time of women which would be spent in collecting wood otherwise.
- This saved time can be invested in education or employment opportunities.
- It also protects the health of women by doing away with smoke produced from burning wood.
India as a gas economy
- India has commitments under COP 21 towards climate change
- India is also the leader in International Solar Alliance where India has prioritised in moving towards renewable sources of energy.
- India has a natural gas demand of 5 billion cubic feet per day as of 2016 which is likely to increase by 14 billion cubic feet per day by 2040, an increase of 7%.
- Though not significant, it shows India’s commitment towards reducing fossil fuels.
- India is likely to see a growth in renewable energy sector which is 1409% to 256 million tonnes by 2040 from 17 million tonnes presently.
- The share of renewable energy in India will also increase from 2% in 2016 to more than 13% in 2040.
- Though the initial costs are higher in renewable energy, running costs are lower in renewable energy.
- The demand for electricity is continuously growing due to the developmental projects being undertaken.
- India should try to move renewable sources of energy like solar power, wind energy and hydroelectricity for which India has good potential.
- Renewable sources are more reliable as the source can be reused unlike in the case of fossil fuels.