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As the world’s fastest-growing major economy with growing energy needs, India will account for around 25 percent of global energy demand growth between 2020-2040, according to BP’s energy forecast and IEA estimates. It is vital to ensure access, availability and affordability of energy for our large population. This makes our case sui generis and has informed our energy strategy, which is now recognized worldwide as pragmatic and balanced.
How has India managed to do this?
When petrol and diesel prices increased by 35-40 per cent in the USA, Canada, Spain and the UK, and despite importing over 85 per cent of its crude oil requirements and 55 per cent of its natural gas requirements, diesel prices in India has actually declined in the last year. When several countries in our neighborhood have droughts and power cuts to manage demand, there has been no shortage of fuel anywhere in India, even during floods and natural disaster situations.
This was made possible because of Prime Minister Narendra Modi’s vision for achieving energy justice. The Center and many BJP-ruled states announced huge cuts in excise duty and VAT rates, twice. Oil PSUs, being good corporate citizens, absorbed huge losses to ensure that the huge increases in crude oil and natural gas prices in the international market were not passed on to Indian consumers. Subsidized APM gas for the city gas distribution sector was significantly increased even at the cost of reducing the captive consumption of domestic gas by our own PSUs. We even imposed an export cut on petrol, diesel and ATF, and a random tax on domestically produced petroleum products to prevent refiners and producers from profiting at the cost of domestic consumers.
Over the years, India has expanded its network of crude oil suppliers from 27 countries to 39 countries. India has also further strengthened ties with countries like the US (energy trade has increased 13 times in the last four years) and Russia to ensure reliable supply of crude oil. This strategic market card, as the world’s third largest importer, not only ensured affordable energy for Indian consumers but also had a calming effect on global petroleum markets.
What is inevitable is that India’s purchase of petroleum products from certain nations has actually kept global demand and supply of about 98-100 million barrels per day in balance, thereby keeping oil prices check for the global value chain. If this had not been done, global prices would have shot up to $300/barrel.
We are working on exploring traditional fuels as well as energy transition. Our reforms to make India an attractive energy and power destination are reflected in the consulting firm Wood Mackenzie stating that India could be the licensing wild card of 2023. By 2025, India wants to boost its net geographical area which’ n being explored from 8 per cent (0.25 million sq km) to 15 per cent (0.5 million sq km). It has reduced the prohibited/no-go areas in our exclusive economic zone (EEZ) by 99 percent, freeing up nearly 1 million square kilometers for exploration.
However, as demonstrated by PM Modi in Glasgow, we remain steadfast in our climate change commitments – becoming net zero in emissions by 2070 and reducing emissions by 1 billion tonnes by the end of 2030.
We are also rapidly expanding our petrochemical production, in line with the huge increase in living standards and rapid urbanization. India is a global exporter of petroleum products and its refining capacity is the fourth largest in the world after the United States, China and Russia. Efforts are underway to further improve this capacity to 450 MMT by 2040. Expanding the refining capacity was also one of the main factors in ensuring fuel price stability during the volatility of international oil prices last year.
India is also accelerating its efforts to move towards a gas-based economy by increasing the share of gas from the current 6.3 percent to 15 percent by 2030. India has connected more than 9.5 crore families to cooking fuel clean during the last nine years. . PNG connections have increased from 22.28 lakh in 2014 to over 1 crore in 2023. The number of CNG stations in India has increased from 938 in 2014 to 4,900 in 2023. Since 2014, India has increased the length of its gas pipeline network by 14,700 km to 22,000 km in 2023.
During the recently concluded India Energy Week 2023, India took a major step in its biofuel revolution by launching E20 – 20 percent ethanol blended gasoline, which will be rolled out in 15 cities across the country in during the next two years. India’s ethanol blended gasoline has grown from just 1.53 percent in 2013-14 to 10.17 percent in 2023, and now India is also setting up five second-generation ethanol plants that can convert agricultural waste into biofuel, further reducing pollution from burning stubble , and generate income for farmers.
The National Green Hydrogen Mission has been launched with an outlay of Rs 19,744 crore to develop the country’s green hydrogen ecosystem in the country and accelerate India’s efforts towards 4 MT of annual green hydrogen production. It will save Rs 1 lakh crore in cumulative fossil fuel import savings by 2030. India is poised to realize its full potential to create a green hydrogen ecosystem by 2030.
Just like our energy strategy, we are also taking an integrated path for transforming India’s future mobility pathways. So, along with green hydrogen and biofuels, India is also supporting electric vehicles through a production-linked incentive scheme to make advanced fuel cells of 50 gigawatt hours. Duty exemptions have also been announced for the sector. We are targeting the installation of alternative fuel stations (electric vehicle charging / CNG / LPG / LNG / CBG) in 22,000 retail outlets by May 2024.
As we implement our Amrit Kaal plan to become a $26 trillion economy by 2047, ensuring energy security and achieving energy independence remains our key goal.
The author is the Union Minister for Petroleum and Natural Gas and Housing and Urban Affairs