God has been with the Modi Government. It is evident when one sees the downward trend of international oil prices since mid 2004. It dropped from over $100 per barrel to below $30 per barrel in January 2015. Thereafter, it stabilised around $40-45 a barrel. Currently, international oil prices are within India’s comfort zone. But, those who are perceptive can also hear an alarm bell. Last week, a dominant cartel of oil producers, OPEC announced a supply cut by almost 1 million barrels per day from the next month. This is first such announcement by the cartel in almost a decade. It will eventually hit India the most because after America and China, India is the world’s third largest petroleum importer. Interestingly, India snatched Japan’s third position in 2013-14 by doing nothing significant to reduce its import dependence. According to reports, India imported record crude oil in August this year. And this import dependence is growing alarmingly. India will soon lose its comfort if global crude oil prices breach $50 per barrel mark. History records treachery of international oil prices when it surged to $147 a barrel in July 2008 and then dropped below $40 in January next year only to jump again over $100 per barrel in about two years. India imports more than 80% of crude oil it processes. This import will increase further to sustain its fast economic growth. India’s energy import dependence is unlikely to decrease in the near future as no fresh investments were made in augmenting oil and gas output since 2009-10. There is an urgent need to reduce India’s import dependence else prices of petrol, diesel, kerosene and cooking gas would soar and hit the common man hard.

(Also published in Hindi on Oct 3, 2016 in Amar Ujala http://epaper.amarujala.com/dl/20161003/13.html?format=img)