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Published 13:15 IST, January 25th 2025

How Will India Meet Its Energy Needs Amidst US Sanctions On Russia: Union Minister Clarifies

With increasing energy consumption, India is now in pursuit of a 450 MMTPA refining capacity by 2030.

Reported by: Musharrat Shahin
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India is in Talks with Russia on Crude Oil Deals
India is in Talks with Russia on Crude Oil Deals | Image: R Business

On January 24, India's Minister of Petroleum and Natural Gas, Hardeep Singh Puri, shared insights on the progress of India's oil and gas public sector undertakings. Speaking to financial experts in Mumbai, Puri emphasized that the government is keen on improving the performance of India's Oil & Gas PSUs, which have shown significant improvement in FY23-24. This result is due to sound leadership, governance reforms, and a work culture under Prime Minister Modi.


Puri said that India had vowed to acquire the cheapest and cheapestly-priced crude oil in order to make energy available to its customers throughout. He said that no country has any fixed quantity treaty with India, but India always strikes the best deal for obtaining crude oil that would meet the requirements of its refineries.


Talks with Russia on Crude Oil Deals
 


The talks between Indian refineries such as IOCL, BPCL, and HPCL have been with the Russians over term-deals in crude oil. This talks seem to be stuck, particularly following new US sanctions imposed on Russia recently. As such, the prospects of Indian importing oil from Russia are going down, and it is expected that Indian refineries will be returning to their long-term suppliers: Saudi Arabia and Iraq.

Green Energy Transition


While responding to issues on oil supply, Puri assured that there is enough supply of energy while at the same time pointing out that more crude is coming into the market while some producers scale down production. He pointed out that the government is also paying attention to switching to green energy, yet maintaining affordable energy flow.

India's Upcoming Refining Projects


On the Ratnagiri refinery, planned at 60 MMTPA, Puri said the project was not feasible as it was too big and land acquisition was difficult. Instead, three smaller refineries of 20-25 MMTPA each are proposed to be constructed. BPCL is also coming up with a new 9 MMTPA refinery in Andhra Pradesh and other OMCs are expanding their refining capacities.


With increasing energy consumption, India is now in pursuit of a 450 MMTPA refining capacity by 2030. Currently at a capacity of 250 MMTPA, this fact reflects India's strategic unfolding to broaden its energy infrastructure base for future growth.

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Updated 13:15 IST, January 25th 2025