Opening of new oil blocks and discovery of small oil fields would boost the oil production and help to reduce imports: PHD Chamber
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Oil is a critical input to the India’s industry and economy. In the short term, oil demand is inelastic to price which means that when oil price increases, the oil import bill increases proportionally. Despite high international oil prices, India's oil import demand has increased significantly during the recent quarters.
The recent oil imports challenges the goal set by the Hon'ble Prime Minister, to increase production and reduce reliance on imports. The import bill increased from US$62.2 billion in FY21 to US$120.4 billion in FY22 as crude oil prices escalated and import bill widened.
Going ahead, there is a need to enhance production and reduce oil consumption by substituting alternate fuels like ethanol, bio gas and biodiesel, along with promotion of natural gas as clean fuel/feedstock in the country. At this juncture, further policy reforms and opening up of new oil blocks under Open Acreage Licensing Policy (OALP) and Discovered Small Fields (DSF) would significantly help to increase the production and reduce import dependency, said Mr. Pradeep Multani, President PHD Chamber of Commerce and Industry.
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