Amid escalation of war in West Asia, Union minister of state for petroleum Suresh Gopi informed Parliament on Monday that India’s strategic petroleum reserves (SPR) are 64% full. At current consumption rates, this stock would last about five days, he added.
India has “SPR facilities with a total capacity of 5.33 million metric tonnes (MMT) of crude oil at three locations in Andhra Pradesh and Karnataka, which can act as buffer for short-term supply shocks,” Gopi said. Currently, the reserves hold around 3.37 MMT of crude (24.7 million barrels), he added.
India consumes about 5 million barrels of oil per day.
Earlier, Prime Minister Narendra Modi also advised the countrymen to state prepared for an emergency-like situation. Speaking in the Lok Sabha, the Prime Minister urged all political parties and government to stay united. Advising state governments to stay alert, he said that elements such as hoarders become active during such crises, and strict monitoring and swift action are required to tackle this menace.
The ongoing West Asia conflict has sent shockwaves across the world, directly impacting countries. The energy crisis has spilled over to sectors like transport, agriculture, industry, inflation and household budgets.
For a developing industrial state like Odisha, the global energy crisis can translate into slower growth, higher prices and pressure on livelihoods, warn analysts.
As New Delhi imports nearly 88–90% of its crude oil, out of which about 45–50% imports come from the Middle East, any disruption
in this region immediately raises fuel prices and transport costs across India.
The closure of Strait of Hormuz, a narrow shipping route in the Gulf, which handles a major share of India’s oil imports, has severely impacted India and its states, including Odisha.
Though a coal-rich state, Odisha is still heavily dependent on oil for transport, mining logistics, agriculture machinery and industry.
Freight transport, crucial for Odisha’s mining and industrial economy, which is the biggest diesel consumer, is the first casualty. In other words, as the state transports coal, iron ore, steel, aluminium, fertilisers, food grains, among others, higher diesel prices will directly hit the logistics, which in turn will hamper the state economy.
Besides, since Odisha, unlike other states, is mostly a resource-exporting state where goods travel long distances from mines to ports and factories, a price rise in fuel, especially diesel will have a double impact on the state economy. Similarly, it will also impact the mining infrastructure, which relies heavily on diesel for excavations, dumping, etc.
Fertiliser shortage is yet another area of concern. Any disruption of fertilizer in the Kharif season will affect the crops in the state, which in turn will directly affect the livelihood of millions of farmers who are dependent on it. It will also put a hole in common man’s wallet as supply of food will be impacted by shortage of food grains. This can trigger rural economic slowdown, because agriculture drives rural demand in Odisha.
Like other states, LPG shortage is yet another concern as about 79% of households use LPG for cooking. LPG price increase will directly affect household budgets, which in turn will see a decline in household saving, thereby reducing spending in the local economy.
Despite these risks, Odisha has one advantage — coal.
As the state produces large amounts of coal and generates most of its electricity from coal, it has the potential to provide energy stability by protecting its citizen from electricity shortages even if global fuel prices rise.
However, the ongoing West Asia crisis is a reminder that Odisha may be coal-rich, but it is still energy-vulnerable. The next decade will not be decided by which state has more minerals, but by which state has more energy security. Coal gave Odisha its industrial past; renewable energy, storage and electric transport will decide its industrial future.
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