The increasing demand for hydrocarbon fuels to propel the burgeoing growth rates of countries like China and India has caused the prices of oil to to move upwards. What existed at $ 20 per barrel now stands at close to $59 and some say this is just the beginning.
The primary reason for this is that major oil wells and oil rich countries are pumping oil to the maximum capacity. This means that oil wells with large capacities are operating at their maximum output.
Demand too has witnessed a sharp surge due to the growth in countries such as India and China. All this has led to the oil producing countries to increase their output to level out the demand supple effect.
India has its share of worries too. The country is witnessing a growth rate of 13 % which is phenomenal and the last thing it would like is this growth being impeded due to rising oil prices. To some extent, it is to be blamed for this situation.
Lack of alternate fuel resources such as natural gas has increased the dependence on hydrocarbon fuels. Also, the country relies on imports for major part of its consumption. As a result, any fluctuation in the oil prices at a global level has repercussions on the Indian markets and domestic scenario as well.
Another reason is the high dependency on the hydrocarbon fuels such as petrol and diesel. With no recent strike in oil sites, the resources have not increased as compared to the demand.
Gearing for the future ?
The recent decision by the government to mix ethane with petrol seems optimistic but how far is it realistic, time will tell. The primary source of ethane is certain plants. So if Ethane has to be obtained to fuel the energy needs of the country then cultivating and harvesting these plants would need to happen. This process takes time and is not instantaneous as a result the plans would need time to be implemented. The other source is import which would imply costs to the country. The planning in this regard of the country seems to be behind its times.
A heartening move keeping the future in mind is the investment in exploration of oil fields in foreign regions such as Russia and some other Balkan states. This is indeed optimistic and an aggressive move by companies such as ONGC and others.
The growth rate being experienced by India is something that is vital not only for the country’s development but for the sub-continent. And in this light, a setback to the energy needs of the country would hurt it the most.
Planning needs to be fast and quick to aver such a crises….