Oil Market in India

News: Energy giants like Russia and Saudi Arabia have been looking for a slice of the rising market in India. As per the estimates of the Organisation of the Petroleum-Exporting Countries (Opec), world oil demand will rise from 96.44 million barrels per day (mb/d) in 2021 to 100.59 mb/d in 2022. Therefore, to counter the rising prices and ensure sustainability, India needs a transition strategy away from fossil fuels.

Background:

  • India will depend on imports for 85% of oil and half its fuel needs. It can elevate oil manufacturing by 20% by higher managing present fields however, for extra, it needs main discoveries, which have not come by in a very long time.
  • Cooking fuel might be India’s new vulnerability as consumption has risen with elevated entry. But its world provide is unlikely to develop considerably sooner or later as new refiners are likely to prioritise petrochemicals manufacturing the place LPG turns into a feedstock.
  • Therefore, India must search options reminiscent of electrical, photo voltaic, fuel or biogas to exchange LPG.

Concerns for India:

  • The United Nations Environment Programme’s (UNEP) latest Production Gap Report has revealed that 15 of the top fossil fuel producing countries, including India, are not prepared to meet the requirements of the 2015 Paris Climate Agreement.
  • Paris Agreement seeks to keep global warming “well below 2 degrees” above pre-industrial levels.
  • In order for the world to meet the Paris Agreement goals, “global coal, oil, and gas production (and consumption) have to start declining immediately to be consistent with limiting warming to 1.5°C.”
  • India is the seventh-largest producer of fossil fuels among the 15 countries. As part of the Paris Agreement, India pledged a 33%–35% reduction in the “emissions intensity” of its economy by 2030, compared to 2005 levels. However, as part of the Atmanirbhar Bharat campaign, the government pledged to become a self-reliant producer of coal and made a plan to invest Rs 500 billion worth of infrastructure for coal extraction.
  • India doesn’t have a federal level policy on scaling down production of fossil fuels, or ensuring a just transition into renewable energy. Global cost of air pollution from fossil fuels is high. It was around $2.9 trillion per year, or $8 billion per day, which was 3.3 per cent of the world’s GDP at the time.
  • India is estimated to bear a cost of $150 billion from air pollution caused by fossil fuels.
  • As of now, human activities have already caused global temperatures to rise by about 1 degree Celsius above pre-industrial levels (1950-1900).
  • Currently, countries’ emissions targets are not in line with limiting global warming to under 1.5 degrees.