The Cabinet Committee on Economic Affairs is likely to likely to consider the proposal to reform in domestically produced crude oil in its meeting conducted through video conferencing on Wednesday, June 29, sources told News18.com on the day. According to them, the CCEA meet has already begun, where ministers will discuss the issue. This comes against a backdrop of India producing historically low amounts of crude oil in decades.
As per the sources, the CCEA, led by Prime Minister Narendra Modi, is expected to take up a proposal which deals with reforms in domestically produced crude oil in India. The proposal, made before the Cabinet, is to ease the regulation for domestically produced crude oil, they said. The proposal is aimed at increasing the domestic production of crude oil in the country.
The CCEA meet began at 11 am on Wednesday through video conferencing. The outcomes of the meeting are likely to be announced by Thursday, June 30, by Union minister Anurag Singh Thakur.
India’s domestic crude oil production has been on a consistent decline since FY15. In FY22, the country produced only 28.4 million tonnes (MT) of crude oil, which is the lowest in nearly three decades, since FY94, as per reports. The government, for this reason, now looks to increase the production of domestic crude oil.
India’s crude oil production has been on a decline during the past few years. From 35.7 million tonnes in 2017-18, it fell to 34.2 million tonnes in the following year and 32.2 in 2019-20, and 30.5 million tonnes in 2020-21. The crude oil production in FY22 was 11.67 per cent below the target of 33.61 million tonnes, according to official data released by the oil ministry.
The main reason for the decline in production of domestic crude oil is the aging fields in the country where natural production decline has set in. The output is being maintained by investing in technologies to boost the recovery rate. Meanwhile, India’s crude demand has soared over the years, with the outputs declining, thereby making the country rely more and more on imports.
India’s largest crude oil producing firm, Oil and Natural Gas Corporation (ONGC) produced 19.45 million tonnes of crude oil in the fiscal FY22, which was 13.82 per cent lower than the target and 3.62 per cent less than the output in the previous fiscal year. ONGC’s crude oil production in FY22 was also the lowest in a decade, adding to the country’s woes of producing lesser crude oil. This was due to less-than-anticipated production from the WO-16 cluster in the western offshore due to a delay in the mobilisation of a production unit and less oil in the NBP field due to an inspection-related shutdown, it said.
If the government approves the reform in the regulation of domestically produced crude oil at the CCEA meet on Wednesday, chances are that India will recover from the current situation.
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