India is the third-largest energy consumer in the world. It has increased domestic oil and gas exploration, diversified its import basket, switched to alternative sources, and used gas and green hydrogen to transition to security and energy transition, Hardeep Singh Puri, Oil Minister, said Sunday.
Puri was present at an event that showcased old boats on the holy city’s ‘ghats’. The event switched to CNG over polluting diesel and said India will contribute fourth to the world’s energy demand growth within the next two decades.
India mixes ethanol from sugarcane and other agri products in petrol to reduce its dependence on imports, even though the country is still dependent on imports for 85 percent of its oil and 50 percent of its natural gas needs.
Puri stated that the company will be able to achieve 20% ethanol blending in petrol before 2025.
He stated that “our energy security strategy is built on four pillars: diversification of energy supplies; increasing exploration and production footprint; using alternate energy sources and meeting energy transition through gas-based economies, green hydrogen, and EVs.”
India has increased its number of crude oil suppliers from 27 in 2006-07, to 39 in 2021-22. This includes new suppliers such as Columbia, Russia and Equatorial Guinea.
Crude oil is extracted below the surface of the earth and refined into fuels such as petrol or diesel. You can also find natural gas below the earth’s surface. It is used to make electricity, fertilizer, and to convert to CNG for automobiles. Then it is piped to homes to be used in cooking.
Globally, energy prices rose after Russia invaded Ukraine. However, Indian consumers were protected as the state-owned retailers didn’t raise prices in line with this spurt.
Puri stated that diesel prices, the most widely used fuel in the country, rose only 3% between December 2021-December 2022, while they increased by 34% in the US, 36% in Canada, 25% in Spain, and 10% in the UK.
Diesel prices rose from Rs 86.67/litre in December 2021, to Rs 89.62 one year later. The petrol rate rose from Rs 95.41 to Rs 96.72 per litre.
However, the increase was temperated by a reduction in excise duties. In 2020, when global energy prices were soaring due to the pandemic, the government increased the excise duty on petrol and diesel by Rs 13 per litre. The hike was reversed in two installments in November 2021, and May 2022.
To help consumers, some states have also reduced VAT (or local sales tax) on fuel. Puri stated that the government aims to increase India’s exploration area to 0.5 million km by 2025, and 1 million km by 2030.
Expanding exploration will lead to more discoveries, increasing domestic oil and gas production and reducing import dependence. India also increased the ethanol blend in petrol from 1.53 percent in 2013-14 to 10.17% in 2022. It has also advanced its goal to reach 20 percent ethanol blend in petrol by 2030 to 2025-25-26. He stated that the gradual rollout of E20 would begin in February or March.
The government is simultaneously adding to supplies by creating compressed biogas (CBG), plants that make gas from animal and agri-waste.
He said that India has been made a major hub for green hydrogen production, which is the fuel of the future with zero carbon footprint. The incentive under the National Green Hydrogen Mission was Rs 19,744 crore. Also, the goal to produce at least 5,000,000 tonnes per year of green hydrogen by 2030 has been set. He said that fuel retailers are establishing alternative energy sources like EV charging, CNG, and LPG at 22,000 petrol stations by May 2024 to help with the energy transition.
