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Economic Gains and Losses for Sustainable Policy Development of Crude Oil Resources: A Historical Perspective of Indian Subcontinent

Author

Listed:
  • Ali Raza

    (University of Sindh Jamshoro, Pakistan,)

  • Maryam Khokhar

    (Department of Business Studies, Bahria Business School, Bahria University of Karachi Campus, Pakistan,)

  • Reyna Esperanza Zea Gordillo

    (Universidad de Ciencias y Artes de Chiapas (UNICACH), Tuxtla Gutiérrez, Chiapas, Mexico,)

  • Faisal Ejaz

    (School of International Relations, Minhaj University, Lahore, Pakistan,)

  • Tahir Saeed Jagirani

    (University Utara Malaysia, Malaysia,)

  • Fodor Zita Júlia

    (Institute of Economic Sciences, the Hungarian University of Agriculture and Life Sciences, Godollo-2100, Hungary,)

  • Md Billal Hossain

    (Department of Business Management and Marketing, School of Business and Economics, Westminster International University in Tashkent, 100047 Tashkent, Uzbekistan.)

Abstract

Energy fluctuations and global economic directly hit the Indian Subcontinent (Geopolitically, it generally includes the countries of Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan, and Sri Lanka) economy and social welfare, which are the net importer of energy sources. This study investigates the relationship between strategic petroleum reserves and welfare losses for the Indian Subcontinent. The breakdown of the crude oil energy supply significantly impacts energy security and and welfare losses. Oil supply security was quantified in terms of the Indian Subcontinent’s oil vulnerability index (which accounts for 84% of global oil imports), and welfare losses based on oil supply disruption were calculated. Afghanistan is the most susceptible country in the Indian Subcontinent regarding energy reserves, as per the composite index results, whereas India is the least vulnerable. Empirical findings pointed to a 30% oil supply deficit as the cause of the most volatile pattern of oil pricing, which exacerbates the estimated welfare loss by a 40% drop in GDP, which is around $700 in the Indian Subcontinent $9000 in the top oil-consuming countries. According to this analysis, the Indian Subcontinent should keep at least a hundred days’ worth of strategic oil resources to avert social and economic losses due to oil price fluctuations.

Suggested Citation

  • Ali Raza & Maryam Khokhar & Reyna Esperanza Zea Gordillo & Faisal Ejaz & Tahir Saeed Jagirani & Fodor Zita Júlia & Md Billal Hossain, 2024. "Economic Gains and Losses for Sustainable Policy Development of Crude Oil Resources: A Historical Perspective of Indian Subcontinent," International Journal of Energy Economics and Policy, Econjournals, vol. 14(2), pages 642-655, March.
    • Handle: RePEc:eco:journ2:2024-02-64
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    More about this item

    Keywords

    Oil Supply Security; Unit of GDP; Energy Reserves; Energy Fluctuations and Global Economic; Indian Subcontinent;
    All these keywords.

    JEL classification:

    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • Q01 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General - - - Sustainable Development

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