Growing oil imports make India more vulnerable to supply disruption, price volatility: IEA
NEW DELHI : The International Energy Agency (IEA) has warned that India’s growing dependence on oil imports will make the country even more vulnerable to supply shocks and price volatility, and that the third largest economy of Asia needs to diversify its energy sources and add alternate fuels.
IEA said in its ‘India energy policy review 2020’, released here in the presence of ministers handling energy portfolios and officials of federal think tank Niti Aayog, that India’s strong dependence on oil imports, already at 83%, is expected to increase further. The agency also estimated that India, which currently is the world’s third-largest consumer of oil after China and the US, will surpass China in oil consumption in the mid-2020s.
“With an oil import bill of around 4% of gross domestic product today, and 65% of imports coming from the Middle East (West Asia) through the Strait of Hormuz, the Indian economy is and will become even more exposed to risks of supply disruptions, geopolitical uncertainties and the volatility of oil prices,” IEA said.
