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Energy Shortage Becomes Indian Bottleneck

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Latest observation shows that grinding energy shotage has influenced india's economic growth. Like China, India is a developing country with large population. Therefore, there is hugh demand for energy. However, at stake is India's ability to bring electricity to 400 million rural residents─a third of the population─as well as keep the lights on at corporate office towers and provide enough fuel for 1.5 million new vehicles like mobile stone crusher added to the roads each month.

Shortages of coal, oil and natural gas will require India to import increasing amounts of high-cost fossil fuels, say energy experts, risking inflation and putting the country in stepped-up competition with China, Japan and South Korea. Buying oil from Iran, one of India's biggest suppliers, is tougher because of U.S. and European sanctions aimed at curbing Tehran's nuclear ambitions.

With annual demand expected to more than double in the next two decades to the equivalent of six billion barrels of oil, the energy crunch threatens to knock India off its growth path. The national economy has already slowed amid paltry business investment and stalled reforms. It tallied just 5.3% growth in the quarter that ended March 31, the lowest level in almost a decade and well shy of the country's 9% goal.

Expensive imports have taken a toll on the nation's finances. Though global crude oil prices have eased in the past few months, India is seeing little benefit because its currency, the rupee, has been dropping against the dollar, the currency used to price oil.

State-run energy companies are racking up billions of dollars in losses by selling auto fuel, cooking gas and electricity at artificially low prices to protect consumers from global cost increases. In May, India's oil marketers raised gasoline prices 11.5%, the largest increase ever. The move was a sign of new urgency in the government to improve the fiscal health of the oil companies, though prices were cut 3% after a public backlash. china vibrating feeder:http://www.hx-crusher.com/vibrating_feeder.html
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Economists say gasoline prices need to increase more, with the tougher task of deregulating the prices of diesel and cooking gas still ahead.

'The prime minister and a few wise men are beginning to realize that there's a very bleak outlook in terms of energy security, and that this is going to create the single largest constraint on the economy, one of alarming proportions,' said Gokul Chaudhri, a partner at New Delhi-based consultancy BMR Advisors, whose clients include Indian and foreign energy firms.

Vast tracts of rural India lack electricity. Even in such business hubs as Delhi's suburb of Gurgaon, companies employ backup generators because of regular outages. Factories are forced to curtail production. And vaccines that require refrigeration go bad because of spotty service.

A shortage of coal, which accounts for more than half of the nation's energy supply, is crippling the power sector, forcing companies to delay the opening of multibillion-dollar projects. India in April announced an 80% jump in coal imports for the fiscal year ended in March, to $17.6 billion. But many plants still run below capacity for lack of coal.

After top power companies lobbied Prime Minister Manmohan Singh, the government in April issued a presidential directive ordering Coal India Ltd., India's state-run monopoly, to increase production or imports. Officials also cut India's electricity generation target for the next five years by 25%, reflecting worries the coal shortage will continue.

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