Economy

Energy security must be delinked from geo-politics

Richa Mishra New Delhi | Updated on March 24, 2013 Published on March 24, 2013

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Bilateral ties between nations have to look beyond geo-politics as far as energy security is concerned, say officials in the domestic oil industry.

Be it import of crude oil or export of end products, geo-politics has had a direct impact on business. A fine example of this is what has happened with Iran or more recently the timing of statement made by Sri Lanka.

The Indian economy is at a stage where energy requirement is increasing at an intense pace.

India is the fourth largest crude oil consumer in the world after the US, China and Russia, and close to 80 per cent of its requirement is met through imports.

Refinery hub

But, on the refining front, the domestic industry has done well. India is emerging as a global refinery hub, with capacity exceeding the demand. India became a net exporter of petroleum products in 2001.

During 2011-12, the country has exported 60.84 million tonne of petroleum products worth Rs 2,66,486 crore. According to a Platts assessment, India is the largest exporter of petroleum products in Asia since August 2009.

The total refining capacity in the country, at present, is 215.07 million tonne and projected to increase to 239.57 million tonne in 2013-14 with capacity augmentation of existing refineries and commissioning of the 15 million tonne Paradip refinery.

Expansion of Kochi Refinery from 9.5 million tonne to 15.5 million tonne through Integrated Refinery Expansion Project has been planned, and a 9-million-tonne greenfield refinery is also being set up at Barmer, Rajasthan.

Given this scenario, Indian refiners at any time will have products in excess of 60-70 million tonne. Even today the domestic consumption is close to 155 million tonne and the refining capacity is 215.07 million tonne.

Indian refiners can have secure business from the neighbourhood – Pakistan, Sri Lanka, Nepal, and Bangladesh.

Lanka move

In fact, Indian Oil Corporation was invited by Sri Lanka and Mauritius Government’s to invest there.

Reports of the recent announcement by Sri Lanka that it would partially take over a strategic oil storage depot in Trincomalee from Indian Oil Corporation, did not come as a surprise to the Indian refiner, as this has been in the air for sometime.

But, what is interesting is the timing of it, which is an indicator of what lies ahead in the days to come.

Sri Lanka’s announcement came after India voted in favour of a US-sponsored resolution against Colombo at the UNHRC.

Industry observers are quick to point out that where India is not able to extend bilateral cooperation, China sees it as an opportunity to step in and contribute to the local economy.

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Published on March 24, 2013
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