The result--Public Sector companies hunted for acquiring exploration blocks abroad, and the Centre woke up giving major thrust to exploration and production (E&P) of oil. The year 2006 was persistently marked by high crude prices in the international markets which had its aftermath on India.
It resulted a see-saw battle between the Left parties and the UPA government on the level of subsidies that need to be given to the consumers. Higher subsidies would impact adversely on the health of Oil Marketing Companies and hiking domestic oil prices would not cut ice with the electorate.
The government did a tight-rope walking and finally left the prices of LPG and Kerosene untouched and put as minimal a burden as possible on the consumer.
The Energy prices stroked the fires of inflation, which became the main worry of the government in an otherwise satisfactory macro-economic scenario.
But the world had come to live with high prices of oil and nowhere--unlike in the past-- growth fell in any substantial manner.
A part of the explanation lay in the fact that industry everywhere has restructured itself and become more efficient.
The challenge also led the government and industry to explore alternative fuels-- and biofuels became a buzz word. The use of Jatropha would not only provide an alternate to oil, but also provide employment to many.
The close of the year came as a welcome relief as global crude prices plummetted to 57 dollars a barrel from their peak 77 dollars per barrel.
India received the first installment of crude oil from Sakhalin-I oil field in Russia, in which ONGC's overseas arm ONGC Videsh Ltd (OVL) has a 20 per cent stake. The one lakh tonne of Sokol crude will augment domestic supplies, as India jumped on the chart of oil consumers to second position. China tops the list.
High growths and large populations have made India and China large importers of oil, which has often become a reason for worry in the West and elsewhere.
MORE PKS-DKS-GS PM1516