60 per cent of the oil basket is still heavily subsidised

Acquisition of oil, gas assets overseas vital for energy security: IOC

With the country's dependence on oil imports set to go up further as the demand increases, oil and gas companies need to strategically acquire equity in oil and gas assets abroad to augment supplies, according to Mr. B.M. Bansal, Chairman and Director (Planning & Business development) Indian Oil Corporation Ltd.About 80 per cent of oil demands are currently met through imports and this figure is likely to go up further in the years to come. The share of oil in the Indian energy mix has risen from 18 per cent in 1960 to around 33 per cent at present, he said.Mr Bansal's speech was delivered in absentia by Mr. N. Srikumar, Executive Director of AP State Office of IOC, at a lecture on ‘21 {+s} {+t} century challenges to public sector: A case of public sector oil and gas companies', organised by the Institute of Public Enterprise here on Monday.

According to Mr. Bansal, the share of public sector undertakings in India's GDP, which was as low as 10 per cent in the early 1970s has today reached to over 22 per cent. IOC's contribution in this growth is significant. The Indian Oil group companies today own and operate 10 of India's 20 refineries with a combined refining capacity of over 60 million tonnes a year. One of the key challenges is with respect to expansion of markets and diversification of businesses. The country's hydrocarbon sector faces plethora of challenges, besides volatile crude oil prices, and policy inconsistencies, which are hampering the growth of the sector, he said.

Subsidy rationalisation
Making out a case for rationalisation, the Indian Oil chief said subsidy rationalisation is another major challenge. While recently, petrol was freed from controls, even today, nearly 60 per cent of the oil basket comprising diesel, LPG and kerosene is still heavily subsidised.
In 2009-10, India consumed over 140 million tonnes of oil and gas and this figure is set to progressively increase to reach over 300 million tonnes by 2030. To augment additional resources, it is estimated that the country would require about $233 billion by 2030, he stated.

The Hindu Business Line

Hyderabad, July 5