India’s Energy Sector: A transition towards growth & vision
New Delhi: In a recent address at the Federation of Indian Petroleum Industry (FIPI) Awards, Union Minister for Petroleum and Natural Gas, Hardeep Singh Puri on Tuesday highlighted the significant achievements and future goals of India’s energy sector. His speech underscored the pivotal role of energy in India’s economic growth and the nation’s ambitious vision for a sustainable energy future.
The minister emphasised that India has emerged as one of the world’s largest energy consumers, with daily crude oil consumption increasing from 5 million barrels in 2020 to 5.4 million barrels currently. India’s share in global energy demand is expected to rise significantly, contributing at least 25 per cent of the increase over the next two decades. This surge in demand is closely tied to India’s economic trajectory, with energy being the “vertebrae” of economic growth, essential for transitioning from a $4 trillion to a $10 trillion economy.
Regarding biofuels and the green energy revolution, Puri noted that India has made remarkable strides in biofuel adoption, achieving a 10 per cent ethanol blend in petrol five months ahead of the December 2022 target. The country is now set to reach a 20 per cent blend by October 2025, five years ahead of schedule. This progress is attributed to improved feedstock availability and government-backed incentives, which have supported farmers while reducing the import bill by Rs. 91,000 crore.
“Biofuel blending is not just about green energy; it’s about bolstering the agricultural sector,” the minister said. He also highlighted advancements in compressed biogas and natural gas as part of the broader energy mix.
The government has undertaken significant reforms to open up India’s vast sedimentary basins for exploration and production (E&P). Previously restricted zones covering nearly 1 million square kilometers have now been unlocked. Moving from production-sharing to revenue-sharing contracts has created a more business-friendly environment. “Decisions we take today will pay off in years to come,” Puri remarked, urging stakeholders to maintain focus on sustainable development.
India’s refining capacity stands at 258 million metric tons (MMT) annually, with plans to increase this to 310 MMT. The country imports a substantial amount of crude but also exports refined petroleum products, enhancing its position as a key global player. Russia has emerged as India’s largest crude oil supplier, accounting for over 35 per cent of imports, compared to a mere 0.2 per cent in February 2022. Other major suppliers include Saudi Arabia, Iraq, and the United States.
Puri underlined the government’s efforts to make energy affordable and accessible. Central excise duty reductions in November 2021 and May 2022 brought down petrol and diesel prices, benefitting consumers. However, he noted the need for state governments to align by reducing VAT for broader impact. Additionally, the Pradhan Mantri Ujjwala Yojana has significantly expanded access to clean cooking fuel. LPG connections have increased from 140 million in 2014 to 300 million today. Piped natural gas connections have also grown from 2.5 million to 12.5 million households.
Talking about India Energy Week and future outlook, the petroleum and natural gas minister of the Modi cabinet also added that India Energy Week 2024 is set to be a landmark event, with over 700 exhibitors, 500 speakers, and 70,000 delegates expected. Puri emphasized the global recognition of India’s energy sector, which now encompasses traditional and green energy, technology, and innovation.
In conclusion, Puri reaffirmed the government’s commitment to fostering a robust and sustainable energy ecosystem. “India is a happening place today,” he declared, crediting the collaborative efforts of policymakers and industry leaders for the nation’s energy transformation.
Puri’s address painted a picture of a nation on the cusp of a major energy transformation. With a focus on biofuels, green energy, and significant reforms in the exploration and production sector, India is poised to play a leading role in the global energy landscape. The minister’s emphasis on sustainability and innovation underscores the government’s commitment to ensuring that this growth is both economically and environmentally sustainable.
As India continues to grow, the energy sector will remain a critical component of its economic development strategy.
