Despite being reasonably supplied with petroleum products at this time, India is looking to increase its emergency reserve of diesel fuel in case of a conflict. Following months of continued uncertainty about energy supply and market price fluctuations caused by geopolitical tensions in the Middle East, as well as changes in crude oil prices on the world market, Indian government officials are beginning to recognize that India’s reliance on imported energy creates insecurity.
Consequently, the government has started talking about expanding its strategic reserve of emergency diesel fuel to create a more robust policy to deal with possible future disruptions caused by a lack of access to oil. Therefore, energy security has become a more important part of policy than it was previously.
The government says current supplies remain adequate
To begin with, the government was adamant that there was absolutely nothing to worry about from the point of view of public concern. At this time India has about 60 days’ worth of crude oil reserves, about 60 days’ worth of natural gas stock, and about 45 days’ worth of LPG rolling stock, and India’s foreign exchange reserves are still healthy at about US$703 billion. The Minister for Defence, Mr Rajnath Singh, assessed the situation in the course of a meeting of the Informal Group of Ministers on West Asia, and, once again, officials stated that piped and rail supply of petroleum continues as normal despite ongoing geopolitical issues, and therefore the Government has discouraged people from panic buying fuel and essential goods because there is no risk to immediate supply security and thus current reserves offer a fairly good buffer to cope with any short-term disruptions that may occur.
The proposal aims to expand reserves to cover three months of demand
At the same time, policymakers are looking into developing a medium-term proposal to increase emergency fuel supplies from 60 days to about 90 days’ worth of national consumption. One possibility is to have state-owned oil companies begin creating greater reserves of crude oil once the current geopolitical situation stabilizes. India relies on imports for almost 89% of its crude oil needs, putting it in a vulnerable position in terms of external disruptions and price fluctuations, and therefore officials believe a larger reserve would allow the country to be less vulnerable during future crises. Also, comparisons have been made with China, which allegedly has enough reserves to meet approximately 6 months’ worth of demand. Therefore, building larger reserves of crude oil is increasingly being viewed as an important step in India’s strategic planning process surrounding energy security.
Rising Import Costs Reinforce the Need for Larger India Strategic Fuel Reserves
Nevertheless, there is an increasing financial load that one’s country bears in order to secure its energy future. Public sector oil marketing companies in the country, as per the government, are currently sustaining significant losses because of high international crude oil prices; that is, they have been absorbing considerable amounts of costs that would otherwise have been passed on to their customers (prices have historically dropped to reduce these liabilities). As such, Prime Minister Narendra Modi is advising citizens not only to use less fuel but also to utilize public transportation or carpooling to reduce individual demand on the system; additionally, he is urging all those who can afford it to abstain from international travelling when avoiding oil imports from that country would be advantageous for India’s economy.
Some key officials have further indicated the need for additional emphasis placed on the continued development of renewable energy sources and improving the overall diversification of energy sources. Thus, both fuel savings actions and reserve expansion initiatives represent the immediate focus for India’s government, while preparing for future energy shocks or disruptions and sustaining economic viability of India will be one of the longer-term areas of focus.
For more- https://civiclens.in/category/national-news-civiclens-in/
About the Author
