The world is facing global fuel crisis due to Iran war. India is also not untouched by this. The crisis can be gauged from the fact that Prime Minister Narendra Modi said in the Netherlands, ‘If the energy crisis is not resolved soon, a large population of the world may get trapped in the quagmire of poverty. Decades of achievements could be ruined. India has set a target of creating a five trillion economy and a developed India by 2048.
If the fuel crisis is not resolved soon, this dream may go far away. This is why the Indian government has started making a strategy to meet its fuel needs. Prime Minister Narendra Modi is on a visit to four European countries apart from the United Arab Emirates. This visit of PM Modi is being considered very important in view of the fuel crisis. In such a situation, let us know how India can deal with this global fuel crisis?
What are the options before India?
- The United Arab Emirates and Saudi Arabia are the only two countries in the Gulf that have arrangements to bypass the Strait of Hormuz. Now the United Arab Emirates has instructed Abu Dhabi National Oil Company to accelerate the construction work of a new pipeline from its Fujairah port to Oman. The UAE aims to have the pipeline operational by 2027. Oman’s eastern border is bordered by the Arabian Sea. The strategic petroleum reserves agreement recently signed between India and UAE also includes storing oil in Fujairah. If the pipeline is ready by next year, India will be able to import crude oil directly from the Oman coast without going through the Strait of Hormuz.
- Saudi Arabia also has about 1200 long pipelines. It supplies oil from its Abqaiq oil processing center to the Yanoub port on the Red Sea. Even during the Iran War, this pipeline had very little impact. This is also an option for India to secure its energy needs. India can buy crude oil from Saudi Arabia through the Red Sea and no Indian ship will have to go to the Strait of Hormuz.
- Prime Minister Narendra Modi recently visited UAE. During this, an agreement was reached between the two countries on increasing the strategic petroleum reserve. This is a big achievement for India. According to the new agreement, UAE will store up to 300 lakh barrels of crude oil in India. Currently stores about 60 lakh barrels of crude oil. After the implementation of the new agreement, India’s strategic reserves will increase by more than 40 lakh tonnes of crude oil.
How many strategic reserves does India have?
India currently has strategic reserves of petroleum at three places. These strategic petroleum reserves built in Mangalore, Padur and Visakhapatnam have the capacity to hold about 38 million barrels of crude oil. Apart from this, India is also building two other strategic reserves in Odisha.
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How should the government deal with the LPG crisis?
Due to Iran war, apart from oil, gas has also emerged as a big crisis across the country. This is why India has taken a big step towards creating strategic reserves of gas in collaboration with UAE. India is now considering creating LPG reserves of 20 to 30 days. Abu Dhabi-based Indian Strategic Petroleum Reserves Limited has entered into an agreement. This company will explore the possibilities of gas storage.
Why is India diversifying oil imports?
The biggest lesson that India has learned from the Iran war is that it does not have to depend on any one country in the matter of energy. Now India is diversifying its fuel needs. Earlier India used to buy crude oil from 27 countries. Now purchases oil from 40 countries. Recently India has started buying oil from Argentina. There is a possibility that purchasing of oil from Venezuela may also start in some time.
America and Russia are also options
Before the Trump administration, India used to buy cheap oil from Russia in large quantities. But it was reduced after the Trump administration’s tariff threat. However, in case of crisis, India has a safer option to buy crude oil from Russia. India also buys oil in large quantities from America. If more imports are made from these countries then the fuel crisis caused by the Strait of Hormuz can be solved.
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promote ethanol
To deal with the oil crisis, India has started increasing production domestically. But even then more than 80 percent of crude oil has to be purchased from other countries. Till now, about 20 percent ethanol is adulterated in petrol. Sharan wants to increase it to 80 percent. This will help in reducing crude oil imports.
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