Our Bureau

Kolkata, Jan. 18

THE Chairmen of ONGC and Coal India Ltd (CIL) are apprehensive about the country's "energy security" as they find no substitute for oil as transportation fuel while bulk coal consuming industries such as power, steel, cement and fertiliser are likely to continue to find it difficult to get fresh linkages from domestic sources till new mines are ready.

Speaking here at the valedictory function of the first Asian Mining Congress & International Mining Exhibition, both Mr Subir Raha of ONGC and Mr Shashi Kumar of CIL stressed on the need for an integrated energy policy for maximising exploration of new reserves of coal, oil and gas.

The congress was organised by the Mining Geological and Metallurgical Institute (GMMI), coinciding with its centenary year. Over 700 delegates from 12 countries participated in the congress and the exhibition.

Mr Raha said more than two-thirds of all refined products are consumed in rail, road, air and water transportation. Diesel, in turn, the predominant transportation fuel for surface transportation, would alone amount to half of the total sales volume, taking into account its adulteration with kerosene. The essence of energy security was thus dependent on the ensured availability of fuel for surface transportation.

Mr Raha said high sulphur "sour crude" was available in plenty in the Gulf countries, and prices of these varieties of crude were also cheaper. Refining this variety of crude was not cost-effective because significant investments, energy and effort would be required to produce transportation fuel from sour crude. For India, the incremental investment would come to almost $10 billion from refining sour crude. On the other hand, sweet crude, with very less sulphur, attracted at least 20 premium over the ruling prices in the international market.

(This article was published in the Business Line print edition dated January 19, 2006)
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