Oil import bill a big strain on economy: PM

New Delhi, Jan 9 (IANS) Rising oil import bills due to the high prices in international markets are putting a "big strain" on the Indian economy, Prime Minister Manmohan Singh said Wednesday.

"Today over 80 percent of India's requirements of petroleum products is being imported. This dependence on imports is likely to increase," Singh said at the launch function of National Electric Mobility Mission Plan 2020.

"High international prices of oil contribute significantly to India's import bills, to our trade deficit, and also if I may say so in the world of rising energy prices, to inflation, thus putting a big strain on our economy," he said.

The prime minister emphasised on the need for development of electric and hybrid vehicles in a bid to reduce transport sector's dependence on oil.

"One of the ways in which this can be achieved is by faster adoption of the full range of electric vehicle technologies, including hybrid vehicles. These technologies are not only more efficient but they are also cleaner," he said.

Singh pointed out that the transport sector accounted for nearly 30 percent of the world-wide consumption of energy. Of this, three-fourths come from road vehicles.

Oil provides 95 percent of the primary energy consumed in the transport sector worldwide.

According to the International Energy Agency, 75 percent of the projected future increases in oil demand will be from the transport sector. "India and China are likely to account for a major part of this increased global demand for oil," the prime minister said.

The prime minister launched the National Mission for Electric Mobility (NMEM), which aims at national energy security, mitigation of the adverse impact of vehicles on the environment and growth of domestic manufacturing capabilities.

"NMEM is amongst the most significant interventions of the government that promises to transform the automotive paradigm of the future by lessening the dependence on fossil fuels, increasing energy efficiency of vehicles and by providing the means to achieve ultimate objective of cleaner transportation that is compatible with sustainable renewable energy generation," according to an official statement released after the launch function here.

"This intervention will also help encourage the Indian automotive industry to shift to newer, cleaner technologies so that it builds its future competitive advantage around environmentally sustainable products, high end technologies, innovation and knowledge," it said.

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