India’s Vulnerability to Oil Shocks

Author(s):

Ashutosh Kumar , Excel College of Engineering & Technology ; P. Neelameham, Excel College of Engineering & Technology ; S. Arvind Magesh Pandian, Excel College of Engineering & Technology ; V. Shankar, Excel College of Engineering & Technology ; G. Divakar, Excel College of Engineering & Technology

Keywords:

Energy, Transport, Agriculture, Macro-economy, Volatility, and Oil Shocks

Abstract:

This paper examines the trends and patterns in oil shocks and India’s vulnerability to shocks in supply and prices at the national and international levels. First examining the definitions and international experiences of crude oil volatility, a qualitative approach is taken to examine the impact of volatility on major indicators. This paper takes a broad definition of volatility looking at demand, supply and speculation In addition, a manifestation of the country’s dependence on oil and its reflection through different economic and physical indicators such as share of oil in the energy basket, importance of crude oil and petroleum products in the trade balance and the patterns of trade in the recent years is also examined to understand the extent of vulnerability to shocks. It has been found that the vulnerability to these is expected to rise in the future as dependence on imported oil is projected to rise. Finally, based on international experience, measures to mitigate this vulnerability have been recommended. The case study is organized according to four subsystems of the socio-economic system, namely: energy; transport; agriculture & macro-economy. Each of the four major sections includes a brief overview of the subsystem, an analysis of its oil dependency, and a discussion of the likely impacts of oil shocks under business-as-usual policy environments.

Other Details:

Manuscript Id	:	IJSTEV2I11122
Published in	:	Volume : 2, Issue : 11
Publication Date	:	01/06/2016
Page(s)	:	874-882

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