New Delhi: India’s dependence on imported crude oil grew in August, with a 6.4% rise compared to August of the previous year, as domestic oil production declined by 2.9%, according to the Petroleum Planning & Analysis Cell (PPACC) under the Ministry of Petroleum & Natural Gas. This trend highlights the increasing challenges to India’s energy security, especially with global oil prices on the rise.
The PPACC’s latest report shows that the total net import bill for oil and gas jumped to $11.4 billion in August 2024, up from $9.0 billion in August 2023. The increase was mainly due to higher imports of liquefied petroleum gas (LPG), petcoke, and lubricants. From April to August of the current fiscal year 2024-25, crude oil imports also increased by 3.3%, reflecting the growing demand as the economy recovers.
Domestic oil and gas production faced difficulties, with Oil India Limited (OIL) and Oil and Natural Gas Corporation (ONGC) reporting lower outputs. This resulted in a 2.9% drop in domestic crude oil and condensate production in August 2024. This decrease is part of an ongoing issue in increasing domestic production, which is essential for reducing reliance on volatile global markets.
The refining sector also experienced a downturn, with a 1.9% decrease in total crude oil processed in August 2024 compared to the previous year. However, from April to August 2024, the sector saw a slight 1% increase in processed crude, indicating a possible recovery in refining operations.
The production of petroleum products experienced a minor 1% decline in August 2024 year-over-year, amounting to 22.7 million metric tons. Yet, over the five-month period from April to August, there was a 1.8% increase in production. Consumption patterns also showed an increase, with a 3.3% rise, largely driven by higher usage of lubes, aviation turbine fuel (ATF), and motor spirit (MS).
In contrast to crude oil, the natural gas sector showed promising growth, with an 18.4% increase in consumption for the fiscal year up to August 2024. However, August’s monthly data revealed a 1% decrease in consumption, indicating the variability and challenges in matching supply with demand fluctuations.
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