01 Feb 2019, EMIS Insights Industry Report Extract
India Oil and Gas Sector Report 2018-2022
The country, which imports some 80% of its crude oil needs, boasts a mature oil & gas sector dominated by government-owned companies and functioning on underexplored reserves, depleting fields, insufficient infrastructure, and energy subsidies for selected economic sectors and households. Subsidies have been generating revenue loss for oil marketers, and have resulted in a complex pricing policy that for now has been excluded from the nation-wide GST, a VAT-type tax introduced in mid-2017.
To meet the demand from energy consuming sectors such as transport, cement, iron & steel, petrochemicals, telecom, and agriculture amongst others, the government has been encouraging companies to seek oil and gas reserves overseas and has been signing up gas delivery contracts with global suppliers to revive idling gas capacity.
Natural gas is seen as a cleaner alternative to both crude oil and coal, but after signing up to the Paris Agreement, India has been working to reduce its carbon footprint pegged as third-largest in the world. Thus, by 2022 the country has vowed to invest in 12 biofuels refineries producing fuel from items including crop stubble, plant waste and municipal solid waste. In addition, the government expects the share of renewable energy in India’s electricity generation mix to rise to around 18% by 2022, from some 8% as of 2018, chiefly due to capacity additions from solar and wind.
Thus, while India is seeking better ingredients for its fossil fuel basket, it is also pushing other dishes on the menu for when oil and gas will not be enough to feed it to satiety.
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Original source: EMIS Insights Report India Oil and Gas Sector Report 2018-2022