Falling prices of crude oil, thermal coal and liquefied natural gas (LNG) are huge positive for India as energy imports account for 36 per cent of its total imports last fiscal, research firm Crisil Research said in Mumbai.
"Falling crude, LNG, coal prices is a huge positive for India, since energy imports accounted for 36 per cent of its total imports last fiscal," Crisil Research said in a report.
Between fiscals 2009 and 2014, India's energy import bill surged at an average 14 per cent annually to $161 billion. This is expected to rise only 1.6 per cent annually to $175 billion by 2019 because prices of the three commodities are forecast to decline. Subdued prices will also help curb oil subsidies, it said.
"In the last fifteen years, rising prices encouraged significant investments in the oil & gas and mining. Globally, investments in oil & gas exploration and production more than doubled to $5.7 trillion between 1998 and 2013, vis-à-vis the previous 15 years.
"This led to reserve accretion increasing by 1.6 times to 626 billion barrels of oil equivalent over 1998-2013 period," said Crisil Research president Mukesh Agarwal.
Over the next five years, significant supplies of oil of 6-7 million barrels per day (mbpd) are expected from the US, Canada, Brazil and Iraq. Similarly, incremental thermal coal supplies of 1,000 million tonne (17 per cent of global demand in 2013) are expected, primarily from Australia and Indonesia, the report said.
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