The Saudi Aramco incident is a wake-up call to Indian policymakers to work on a cohesive national policy on energy security. Analyse (200 Words)
Refer - Business Line
Enrich the answer from other sources, if the question demands.
IAS Parliament 5 years
KEY POINTS
The 20 per cent spike in the benchmark Brent crude oil price in a intra-day move is perhaps a knee-jerk reaction to the drone strikes that knocked out half of Saudi Aramco’s production capacity and interrupted global crude oil supplies to the tune of 5.7 million barrels per day.
Wake-up call to Indian Policy makers
· With the market carrying comfortable inventories and the US immediately releasing some of its strategic petroleum reserves, immediate supply shocks to consumers from this 5 per cent dent to global output appear unlikely.
· But with the Saudi drone strike exposing the vulnerability of global oil infrastructure to unexpected security threats and setting off a fresh bout of tensions in West Asia, political risk premium is set to make a strong comeback into the oil pricing dynamic.
· India may thus have to brace for a renewed flare-up in oil that bloats its import bill, roils the rupee and re-triggers inflation in an already shaky economy.
· Despite pious statements from successive governments about building strategic petroleum reserves, (Indian Strategic Petroleum Reserves Programme) doubling down on domestic exploration and diversifying the import basket, India has taken is not sufficint towards energy security in the past decade.
· But this remains woefully inadequate against the global norm of 60-90 days’ reserves. Despite much lip service on attracting foreign investments, domestic oil and gas exploration remains a non-starter, with local crude output on a downward curve in recent years.
· Efforts to diversify India’s oil import basket have also witnessed setbacks lately, with the government giving in to US political pressure to reduce imports from traditionally economical sources such as Iran and Venezuela.
Alternative energy resources
· Focus on implementing FAME scheme, (Faster Adoption and Manufacture of (Hybrid and) Electric Vehicles) will reduce oil imports substantially.
· Bio-fuel policy 2018 needs to be given a boost to utilize ethanol as a fuel for vehicles.
Aspirant 5 years
please review it.
IAS Parliament 5 years
Good answer. Keep Writing.
Neeraj 5 years
kindly review
IAS Parliament 5 years
Try to write either in paragraphs or bullet points and provide introduction and conclusion to the answer. Underline the key points and provide sub-headings for better presentation. Keep Writing.
Pavithra.R 5 years
Kindly Review.
IAS Parliament 5 years
Good answer. Keep Writing.
Anu 5 years
Kindly review. Thank you.
IAS Parliament 5 years
Good attempt. Try to include about ISPRL programme, FAME scheme, Biofuels for alternative energy resource. Keep Writing.
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