New Delhi, June 7: India's crude oil import requirement is expected to reach 85 per cent from the present 70 per cent as the country ignores harnessing alternate sources of energy, an Assocham analysis said.
The analysis further said this will be inspite of the fact that the country's refining capacities are poised to grow by 58 per cent in the next four years.
The oil companies, both in public and private sectors, have planned extension in their refining capacities to an ambitious 235 MT by 2012 which would require higher volumes of imported crude. This will in turn affect the import requirement, which is expected to grow by another 15 per cent, said the chamber analysis.
Releasing the analysis, Assocham President Sajjan Jindal said, ''proven oil discoveries are not happening in India to keep pace with its redevelopment process and neither decisive policy pronouncements are forthcoming to harness sources of non conventional energy, the shortage would remain a major issue even at the terminal year of 11th five year plan.'' By 2012, India's energy demand will rise to level of 15 per cent which currently is estimated between seven to eight per cent, he added.
The Chief further emphasis the need to harness alternative sources to fossil fuel based energy, if India needs to acquire energy independence. ''It is true that refining capacities will also register a manifold increase but for that we need a crude oil which is a scarce commodity now and will continue to be so in future too,'' he said. Presently, refining capacities stands at 148.97 million tonnes.
However, some of the projects that are likely to be commissioned during 11th plan are Reliance Petroleum, 29 million tonnes at the Jamnagar SEZ, IOC's 15 million tonnes refinery coming up in Orissa, HPCL 9 million tonnes refinery in Bhatinda, Punjab and BPCL's 6 million tonnes refinery again in Punjab.
From the trade prospective, these capacity additions employ higher imports of crude oil in future, if domestic crude oil production continues to languish.
However, the chamber is of the view that the higher crude oil imports will not impact the trade deficit adversely as most of the new capacities addition are aimed at exporting value added products.
Hence, the import bill would be to a great extent offset by exports of petroleum products. The Chamber Paper also says that the artificial ceiling on the prices of petroleum products will continue to persist in the near future and it would be difficult for the government to continue diverting development revenues to foot the burgeoning oil import bill as it will result in fiscal pressures in servicing the oil bonds.