Untitled Document
  
 

Energy being vital inputs for a wide range of activities including manufacturing, agricultural, mining & construction, has been instrumental in overall economic growth & development. India is currently the world’s fifth largest consumer of energy and accounts for nearly 3.5% of world’s energy consumption. Despite India emerging as the world’s fourth largest economy in PPP terms and the world’s fifth largest consumer of energy, its per capita consumption of energy related products is extremely low as compared to other countries and the world average partly due to the high population. India’s per capita energy consumption is estimated to be about 0.51 tonnes of oil equivalent (toe), while the world average is 1.8 toe/capita and that in OECD countries is around 4.7 toe/capita. The significantly low level of India’s per capita energy consumption indicates that there is huge potential in India for the growth of energy consumption.

Given the strong growth of the Indian economy and rising population, the country’s oil & gas consumption has witnessed substantial increase. Today, Oil accounts for 36% of primary energy mix in India, while gas accounts for 9% of the country’s primary energy mix. India had been self-sufficient in oil to the extent of 70% till the mid of 1980s. However presently, almost 75% of India’s crude oil requirements are met from imports. In view of rapidly rising demand for crude oil and the country’s high import dependence, the development of the indigenous oil & gas industry has always been a high priority area for the Government.

The Indian oil & gas industry constitutes around 15% of India’s GDP and has been instrumental in accelerating growth of the Indian economy. The industry has also emerged as one of the largest foreign exchange earner, with oil exports accounting for 14.7% of the total exports in FY09. The sector is also the largest contributor to the national exchequer as it contributed around Rs 1,617.98 bn as profit, excise & custom duties, corporate tax, sales tax and dividend, in FY09.

The Indian oil & gas industry falls under the purview of the Ministry of Petroleum & Natural Gas (MoP&NG), and being highly regulated, is mostly dominated by Government undertakings. However, with the deregulation of the sector, new private players have also entered the sector.