Net energy import likely to be $115-120 billion for 2011-12.
The net energy import bill for India in 2011-12 is expected to be $115-120 billion, according to an estimate of various ministries in consultation with the finance ministry.
According to senior official sources, crude oil would constitute $95 bn, followed by coal with $15-16 bn and liquefied natural gas or natural gas import at $8 bn.
From 2008-09 till presentation of the Budget in 2011-12, India managed with an average crude oil basket price of $91 a barrel. In 2011-12, the basket widened to $108-110 a barrel. The rise in price apart, the rupee has sharply depreciated against the dollar in recent months, from a steady 45-46 per dollar to 51-52. In rupee terms, the net energy import bill is Rs 5.5-6 lakh crore.
In the current financial year till November 2011, India imported crude oil worth $96 bn while exporting refined products worth $38 bn, making a net import bill of $58 bn. In rupee terms, this is Rs 2.73 lakh crore.
In its draft approach paper for the 12th Plan (beginning April 2012), the Planning Commission has hinted at a more market-determined pricing for energy, both coal and oil. The paper stated import dependence in the case of petroleum has always been high and is projected to be 80 per cent in the Plan. The import dependence for coal is projected to increase, as the growth of thermal generation will require supply which cannot be fully met from domestic mines.
The Plan, the paper stated, must address the challenge of aligning domestic energy prices with global price trends. “The poor will need subsidy, which should be appropriately targeted, but energy prices in general cannot be de-linked from global price levels, particularly where import dependence is increasing,” it said.
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It further stated that for GDP to grow at nine per cent, commercial energy supplies will have to grow at a rate between 6.5 and seven per cent per year. Since India’s domestic energy supplies are limited, dependence upon imports will increase.
“The Integrated Energy Policy, which was approved in 2009, had enunciated principles of energy pricing that equalise domestic energy prices with the prices of imported energy, while allowing for targeted subsidy to the needy and poor. While we have taken some steps in this direction, our energy prices still remain significantly below world prices. This is true for both petroleum prices (other than petrol) and coal. It is also true of electricity, since regulators, often under political pressure, are not setting tariffs to reflect normative cost,” the draft observed.