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import of oil - Shanmugam IAS academy in coimbatore
import of oil

INFO ON DEMAND AND IMPORT OF OIL

What’s in news?

Union Minister of Petroleum & Natural Gas informed Lok Sabha today about the Demand and Import of Oil.

Key data’s:

  • Information given by: The information about demand and Import of Oil was given by the Union Minister of Petroleum & Natural Gas Shri Dharmendra Pradhan in the Lok Sabha today in a written reply.
  • Oil consumption: The consumption of petroleum products in the year 2018-19 was 213.2 MMT.
  • Oil dependency: The percentage of Import Dependency on Oil based on consumption of petroleum products during the 2018-19 was about 83.8%.
  • Petroleum Reserves: With a total capacity of 5.33 Million Metric Tonnes (MMT), Indian Strategic Petroleum Reserve Limited (ISPRL) have established Strategic Petroleum Reserves (SPR) at three locationsVishakhapatnam, Mangaluru and Padur. Total capacity storage of petroleum products is 74 days.
  • Current stock: Oil Marketing Companies (OMCs) currently have stock for 64.5 days
  • Additional Reserves: The Government has given its approval for establishing two more additional reserves with a total capacity of 6.5 MMT. The location was – Chandikhol in Odisha (4 MMT) and Padur in Karnataka (2.5 MMT).

Additional news:

Oil war leads in crash in Price of oil:

  • Initiative by: The Oil war was initiated by the Saudi Arabia after it failed to convince the Organisation of Petroleum Exporting Countries (OPEC) allies and Russia to make a substantial cut in oil production.
  • Intention behind: Raising the production of crude oil and cutting prices at the same time was a tactical move by Riyadh to regain its dominant position in the oil market. 
  • The ongoing oil war between Saudi Arabia and Russia, leads the crude oil price fell by over 31%, registering its single largest fall since the 1990 Gulf War.
  • This crash in oil price will help India in increasing its imports over 84% of its oil demand and satisfy our energy needs.
  • Import bill: By the end of fiscal 2019-20 (March 31), India is likely to pay $105.58 billion on import of 225 million tonnes of crude oil – this is less than the previous year’s bill $111.9 billion for 226.5 million tonnes of oil.
  • If such price remains low, India’s Current Account Deficit (CAD) may come down and it may increase our country’s economy – for each drop of a dollar in crude prices, India’s import bill comes down by nearly Rs 3,000 crore. 

Links to note:

https://www.iasipstnpsc.in/oil-prices/

https://telanganatoday.com/oil-war

https://www.livemint.com/industry/energy/why-consumers-won-t-gain-from-cheap-oil-11583937551204.html

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