The share of natural gas in India’s energy mix has barely moved, reaching only 6.7 per cent. Achieving a boost will require scaling up indigenous output, lowering import dependence, and establishing a supportive policy and regulatory framework Delivering the 75th Independence Day (ID) address on 15th August 2021, Prime Minister Narendra Modi vowed to achieve self-reliance in energy production by boosting the gas-based economy. He wished the share of natural gas (NG) in the total energy mix to go up from subsisting at around 6 per cent to 15 per cent by 2030. He reiterated this at India Energy Week (IEW) held on February 11-14, 2025. Presently, the share is a mere 6.7 per cent. The only way to reach...
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Category: Production vs imports
Don’t undermine oil self-reliance to fund fertiliser subsidy
The Government should focus on curbing systemic inefficiencies in the fertiliser subsidy regime. Funding fertiliser subsidy by oil money undermines the Fund’s core purpose of boosting domestic oil and gas capabilities, jeopardising long-term energy security for short-term fiscal optics The Government should focus on curbing systemic inefficiencies in the fertiliser subsidy regime. Funding fertiliser subsidy by oil money undermines the Fund’s core purpose of boosting domestic oil and gas capabilities, jeopardising long-term energy security for short-term fiscal optics. For the first time, in the nearly five-decade history of implementing the Fertiliser Subsidy Scheme, the Union Government has decided to dip into the Oil Industry Development Fund (OIDF) to finance a portion of the subsidy requirement under the Scheme. The amount...
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Rising import reliance amid regulatory challenge
Despite Government efforts to boost domestic production, policy constraints and pricing caps continue to stifle the energy sector’s growth According to the Petroleum Planning and Analysis Cell under the Ministry of Petroleum and Natural Gas (MPNG), during the first six months of the current financial year (FY) September 2024, India’s consumption of natural gas (NG) increased by almost 12 per cent to 36.850 billion metric standard cubic meters (bmscm) over the corresponding period last FY. However, the import of NG (it is imported in a liquefied form commonly known as LNG) increased by 23 per cent to 18.975 bmscm during this period. Taken as a proportion of consumption, imports were 51.5 percent during April-September 2024 up from 46.8 percent during...
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G7 sanctions slip through the cracks
Russia is the third-largest producer of crude oil, with over 12 per cent of global crude production, and the second-largest exporter after Saudi Arabia. An oil and gas industry worker walks during operations of a drilling rig at Zhetybay field in the Mangystau region, Kazakhstan. Credit: Reuters Photo The reports of the US Treasury Department imposing sanctions on two ship owners in October 2023 for allegedly transporting Russian oil at $75 and $80 per barrel, while relying on US-connected service providers, demonstrate a feeble attempt to achieve the lofty goal set by the G7 in mid-2022. The group, consisting of the United States, Germany, France, Britain, Italy, Canada, and Japan, aimed to punish Russia for its military actions against Ukraine by...
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Regulatory boost to self-sufficiency in energy
Modi Government is giving considerable policy support for the exploration of hydrocarbons so that investors can earn assured return on their investments Delivering the 75th Independence Day address, Prime Minister Narendra Modi set the country a target to achieve self-reliance in energy production by boosting the gas-based economy (besides giving a push to electric mobility and hydrogen production). Modi wants the share of natural gas (NG) in the total energy mix to go up from the current around 6 per cent to 15 per cent. Currently, India imports 50 per cent of its NG requirement. This is because domestic production is hovering around a low of 28.6 – 34 billion cubic metres (bcm) in 2020-21 to 2021-22 (down from a...
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More reforms are needed to attract serious investment in oil & gas
Measures taken by the government recently will remove some impediments holding back investment in exploration and production. Pricing and marketing of produce also need to be unshackled Despite offering an attractive policy environment under the New Exploration and Licensing Policy (NELP) and the Hydrocarbon Exploration and Licensing Policy (HELP), also known as the Open Acreage Licensing Policy (OALP), exploration and production (E&P) of oil and gas hasn’t picked up on the required scale. A major bottleneck has been regulatory hurdles which the government is now trying to address. Three important measures have been implemented by the Union government in recent times to remove regulatory and procedural hurdles faced by E&P companies. One, 0.67 million sq km sedimentary basin lying offshore,...
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Fuel crisis: Government must shed adhocism
Currently, E&P firms are allowed to sell their crude at parity with its international price To deal with the fuel crisis, recently the Modi government has deregulated sale of domestically-produced crude oil; and imposed a cess, or windfall tax, of Rs 23,250 per tonne on crude oil and a special additional excise duty (SAED) of Rs 6 per litre. and Rs 13 per litre on exports of petrol and diesel respectively. On July 20, the SAED on petrol was removed and on diesel was cut to Rs 11 per litre. On on one hand, it expects exploration and production (E&P) companies like Oil India Limited (OIL), Oil and Natural Gas Corporation (ONGC), and Cairn Oil and Gas to increase the...
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Hydrocarbons may give India energy freedom
Windfall tax on oil firms is justified; a robust ecosystem for hydrocarbons can give India the much-needed relief Amid disruption in the global supply chain and steep spike in the international crude prices, the Union Cabinet last week took two major decisions pertaining to the oil sector—deregulation of the sale of domestically-produced crude oil and imposing a cess or windfall tax of Rs 23,250 per tonne on crude oil and a special additional excise duty (SAED) of Rs 6 per litre, Rs 13 per litre and Rs 6 per litre on exports of petrol, diesel, and jet fuel respectively. The Covid-19 pandemic and the ongoing Russia-Ukraine war have acutely affected the global supply chains, besides giving legs to the prices...
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Gas shock: India’s vulnerabilities
The Govt should maintain a reserve of gas equal to a percentage of annual use which can be used as buffer to meet demand at affordable price during crises The Ukraine war has exposed the vulnerabilities in India’s gas supply systems. Our demand for natural gas (NG) is around 54.6 billion cubic meter (bcm) of which nearly 50 percent is met from import as liquefied natural gas or LNG. Russia is the world’s second-largest producer of NG with a share of 10 percent. In total world export of gas, its contribution is even higher at 25 percent. Most of Russian gas goes to the European Union (EU) countries with the latter drawing 40 percent of their total NG supplies from...
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The fuel crisis could be a wake-up call
The Government should look for long-term solutions to correct the current situation of heavy reliance on imports and reduce these to 10-15 per cent During 2014-15, Coal India Limited (CIL) — a public sector undertaking (PSU) — had produced 494 million tons (MT). This was a record 32 MT higher than during 2013-14 and higher than a cumulative increase of 31 MT in the previous 4 years. In 2015, this prompted Prime Minister Modi to set a target of 1500MT for 2019-20. Of this, 1000 MT was to come from CIL and remaining 500 MT from private firms. During 2019-20, India produced around 730 MT with CIL contributing 685 MT. Forget the target, the production fell much short of the...
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