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Impact of Global Crude Oil Prices
Economic growth of a nation is primarily
driven by energy. It is the key element for the sustenance in the future modern
economies. But, sadly the global energy supply system is slanted towards the
limited amount of fossil fuels. In every aspect of development, energy plays a
vital role. It may be related to reducing poverty, increasing productivity or
improving quality of life, but lack of energy acts as a severe impediment to
sustainable social development and economic growth.
Crude oil is one of the important sources of
energy that has the ability to pose threats, in terms of price, to energy
supply and security. It is one of the most necessitated commodities in the
world and India imports around 100 million tons of crude oil and other
petroleum products.[1] World primary energy consumption is 12274.6 Mtoe (Million tonnes of
oil equivalent) in 2011, the primary energy consumption varies with availability
and specific utilities of different types of fuels with the various pie, oil:
33.06%; natural gas: 23.67%; coal: 30.34 %: nuclear energy: 4.88%;
hydroelectricity: 6.45%; renewable: 1.59%.
China leads the
order of absolute primary energy consumption with 21.29%, followed by US
18.49%, Russian Federation comes third with 5.59%, then comes India in Fourth
with 4.55%.[2]
Impact
on Indian Economy
Increasing quantum of energy products, mainly
crude oil, has significant impact on Indian economy. It does not act as just a
source of energy but as raw material in many industries. Prices of crude oil
matter to every economy because it is the lifeline of almost every economy. On
one hand there are major oil producers like Organization of Petroleum Exporting
countries (OPEC), Russia, and United States, while on the other hand are the
importing economies like India, China, and Europe. The demand is increasing
rapidly due to insipid economic growth, coupled with surging production.
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