Rising international oil prices are inflating domestic transport fuel costs in a strong demand environment.
Mumbai: Union minister Nitin Gadkari on Thursday said the country is facing lot of "economic crisis" due to crude oil imports and need to reduce imports and increase exports.
India is the third largest importer of crude oil and rising international oil prices are inflating domestic transport fuel costs in a strong demand environment.
Brent, the benchmark for more than half the world's oil, is trading at a four-year high of over USD 84 per barrel. "It is time for the country to find out import substitute products and we have great potential for the use of ethanol, methanol, CNG and electric transportation system as solutions, Gadkari said after inaugurating the 'IndiaChem - 2018' conference organised by Ficci.
"India is presently ahead in innovation, entrepreneurship, technology, research and development. There is a huge potential in Indian petrochemical sector, but we need import substitutes, pollution-free, cost-effective and indigenous ways to go ahead," he added. While blaming OPEC countries for the current increase in oil prices, he said, "One day they will find there is no market for crude oil."
The minister added that the government had taken a decision to increase production of ethanol, which is important for the country. "As this is the time for India to find solutions for import substitutes, the chemical industry must work towards finding the solutions to curb imports of crude oil at rising prices," he said.
The minister also announced the government's plans to start a pilot project in Mumbai, Navi Mumbai, Pune and Guwahati to run electric buses on methanol derived from coal. Gadkari urged the Indian chemical industry to see if agriculture material can be used to make chemicals.
"We have the technology to produce methane and agri waste to produce ethanol," he said. Globally, chemical industry is estimated at USD 4.7 trillion in 2017 it is also driven by demand from end use industries. Indian chemical industry is estimated to be valued at USD 163 billion in 2017 and contributes 3.4 per cent to the global chemical industry.
Commenting on the opportunities in the sector, P Raghavendra Rao, secretary, department of chemicals and petrochemicals, said, "It is the right time to invest in Indian chemical and petrochemical industry due to vast opportunities that the sector offer.
"In the last seven years, production of total major chemicals and petrochemicals has grown 6.2 per cent and the same is projected to grow by 9.3 per cent by FY 2025. There are opportunities in sectors such as speciality chemicals, pharma, biotech."