Successive Indian governments have formulated policies that tended to nurse consumers of energy at the expense of producers. The current dispensation is no different. Motorists have taken comfort in frozen pump prices and gas price caps but producers face high taxes, and restrictions on pricing freedom.
The government is focused on revenue generation rather than production maximisation. But protecting the interests of consumers, and imposing high costs on upstream operators, may work in nations endowed with copious oil reserves and relatively negligible domestic demand, such as Saudi Arabia, Qatar or Russia. Not so in the case of energy-deprived countries like India — it only makes the nation increasingly dependent on foreign oil and gas, weakening energy security.
Check out these numbers. Domestic production of crude oil has declined 23 per cent to an estimated 29 million tonnes last fiscal from nearly 38 million tonnes or 763,000 barrel
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