(EnergyAsia, October 8 2014, Wednesday) — India remains deeply mired in an energy supply crisis, but for now, it is at least reaping the benefits of an unexpectedly prolonged weakness in global oil, gas and coal prices.

Since reaching a peak of US$115 a barrel in June, Brent crude prices have plunged to a two-year low of US$93 a barrel. Liquefied natural gas (LNG) prices in Aisa are hovering around a three-year low while Australia’s spot thermal coal price recently fell to a five-year low.

The five-month-old government of Prime Minister Narendra Modi has benefitted from the sharp decline in energy prices which have occurred despite the worsening geopolitical conflicts and tensions in the Middle East, Africa and Ukraine. The market’s concerns about potential supply disruptions are being offset by the surge in North America’s oil and gas production coupled with expectations for slower economic growth in Europe, China and Japan.

CRISIL Research, India’s largest independent research house, described the expected continuing growth in global supplies of coal, natural gas and coal as “a blessing” for the nation’s economy which had been reeling from rising energy costs over the last several years.

The firm expects the world’s crude oil supply to increase by eight to 10 million b/d through 2019, surpassing global oil demand growth of four to 4.5 million b/d.

“India’s import bill will grow significantly slower in the next five years than it has in the last five as prices of crude oil, thermal coal and LNG come under pressure. Between fiscals 2010 and 2014, the fuel import bill grew 14% a year (CAGR) because of rising prices and healthy growth in import volumes, especially of coal and LNG,” it said.

Fuel accounted for 36% of India’s US$450 billion import bill for the fiscal year ended March 31 2014, making it the single largest item of expenditure.

As a result of sustained low energy prices, CRISIL expects India’s fuel import expenses to grow at a sharply reduced rate of 1.6% per year over the next five years compared with the previous five.

Between fiscals 2009 and 2014, India’s energy import bill surged at an average 14% annually to US$161 billion.

“We now expect this to rise only 1.6% annually to US$175 billion by 2019 because prices of the three commodities are forecast to decline,” it said.

“Declining prices will also help in reining in oil subsidies, thereby easing the pressure on oil companies and the exchequer.”