New Delhi: The world is not short of energy, and the real difficulty lies in moving it, Union Petroleum and Natural Gas Minister Hardeep Singh Puri said on Monday. Around 104 million barrels of crude oil are available every day, he said, while global consumption is about 94 million barrels. The principal challenge is logistics and distribution, especially through volatile transit routes such as the Strait of Hormuz.
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Puri was speaking on India's energy security at an event organised by the Merchants' Chamber of Commerce and Industry. He said India had so far managed the disruptions to crude oil and natural gas supplies caused by the West Asia crisis and the disruptions in the Strait of Hormuz. "So far we have navigated that uncertainty. In fact, I would say we have insulated ourselves from the turbulence," he said.
The minister acknowledged that the global energy situation remains difficult. "Going forward, it constitutes a challenge. But I can assure you, we won't let things get out of control," he said.
Puri said the current distribution of routes and the West Asia crisis are affecting 40 percent of energy movement. Three of India's major energy suppliers, Qatar, the UAE and Saudi Arabia, are located in or around the conflict zone caused by the war on Iran, he said. Sending crude shipments through the Red Sea instead carries its own risk, he added, because Houthi attacks could threaten shipping lines in that region.
India has spread its exposure by buying from more countries. The number of countries it sources crude from has risen to 41 from 27 earlier, Puri said, which reduces the impact of disruption in any one region. He said every challenge holds an opportunity that has to be used. "Every challenge, every crisis, poses a challenge. Every challenge has in it an opportunity, and that opportunity we will utilise."
Of all the fuels, Puri named Liquefied Petroleum Gas (LPG) availability as his most critical concern. India's dependence on LPG has grown sharply, he said. Domestic connections have risen to 33.5 crore from 14 crore in 2014.
To shore up supply, India has raised domestic LPG production to 54,000 metric tonnes a day from 34,000 metric tonnes, he said. The government is also encouraging consumers to move to alternative sources where they can.
The government's approach is to ensure "availability at all times along with affordability," Puri said. He recalled that Central excise duties on fuel had been cut three times: in November 2021, in May 2022 and on March 10, 2026. The last cut reduced petrol and diesel prices by Rs 10 a litre, he said.
Public sector oil marketing companies (OMCs) are facing under-recoveries of around Rs 530 crore a day, Puri said, and the government has given them financial support.
The stakes go beyond the fuel companies, according to the minister. India's energy demand is growing at three times the global average on the back of strong economic performance, he said. The petroleum sector accounts for about 19 percent of total tax revenues. Any destabilisation in energy management could therefore hit the wider economy hard, he said.
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Puri also said the GOBARdhan (Galvanising Organic Bio-Agro Resources Dhan) scheme will be unveiled on October 1. It is a unified national circular bioenergy initiative with an outlay of Rs 23,731 crore. The scheme will convert cattle dung, crop residue and municipal organic waste into compressed biogas (CBG) and organic manure.
