PM warns of hydrocarbons demand-supply mismatch

India's energy demands would increase by 40 per cent over the next 10 years, whereas the increase in domestic production is likely to be a mere 12 per cent, leading to a huge demand-supply mismatch, Prime Minister Manmohan Singh warned today.

Urging Indian national oil companies to aggressively pursue overseas oil and gas assets, Singh said the country needed adequate energy supplies at affordable prices to ensure continued rapid economic growth. The prime minister was speaking at the inauguration of Petrotech-2010, an oil and gas conference in New Delhi.

''Hydrocarbons including petroleum, coal or natural gas will continue to be our major source of energy for quite some time in the future,'' said Singh. ''There are supply-side uncertainties. Many mature fields are declining in production. Some energy endowed countries have problems in augmenting production because of various reasons including lack of the required technology and political uncertainty,'' he added.

He also emphasised on the need to build strong economic partnerships with countries that are rich in hydrocarbons. For many countries, oil and gas assets are not merely commodities for trading, but are used as instruments to meet their political objectives, he added.

The prime minister pointed out that because of concerns over climate change, there has to be a rethink on the traditional energy basket, which was heavily loaded in favour of fossil fuels.

India imports nearly 80 per cent of its crude oil requirements. Last fiscal, the country spent almost $80 billion to import about 160 million tonnes of crude oil. Domestic oil production has stagnated at below 35 million tonnes.