India says oil, gas energy 'baseload' for foreseeable

India will continue to meet the "baseload" of its energy requirements with oil and gas "in the foreseeable future," even as the world's third-largest energy consumer accelerates efforts towards net-zero emissions by 2070, oil minister Hardeep Singh Puri said today.

Speaking at the World Energy Policy Summit 2022, the minister reiterated New Delhi's commitment to energy transition and its intentions to increase domestic oil and gas production.

"We have declared an ambitious target to increase area under exploration and production to 0.5mn km² by 2025 and achieve 1mn km² by 2030," Puri said.

India is the world's third-largest crude importer. Vortexa data indicate it received its receipts rose to 4.31mn b/d in January from 4.12mn b/d in December, with most state-controlled refineries operating at maximum capacity.

India has been taking steps to reduce the effects of surging energy prices, moving in November to reduce central excise duties on gasoline and diesel. Speaking yesterday, Puri said the government is "acutely sensitive" about pump prices but that some of this is out of its control.

"The price is worked out by the market depending on the quantity that Opec+ puts into the market. Just now we have a situation where the amount of crude available in the market is less than the demand," he said. "We are in touch with these producing countries, and we try to use a margin of persuasion to tell them to make more crude available."

The Opec+ coalition this week decided to press ahead with a quota production increase of 400,000 b/d in March. India and the US have been among the most vocal key global consumers to press for further Opec+ action to curtail price rises towards the end of last year. They along with China, South Korea, Japan and the UK joined in a co-ordinated release of crude from strategic reserves, although only the US has so far acted on this.

India's efforts to reduce emissions include plans to increase the share of natural gas in the country's energy mix from 6pc now to 15pc by 2030. It wants to raise ethanol blending in gasoline — a practice that reduces vehicle emissions — from an average of "over 8pc" at present to 20pc by 2025, Puri said. The government imposed an excise duty on unblended fuel last year as part of a move to boost blending. India's requirements for the 2021-22 sugar season suggest a 11pc ethanol blending target, the Indian Sugar Mills Association said today.

India is also exploring green hydrogen, with Puri flagging that local oil and gas companies are looking to develop the resource as fuel and to infuse it in gas pipelines.

"As our economy grows to $5 trillion by 2025, and towards $10 trillion by 2030, our bourgeoning energy needs will take shape and in turn the energy markets will be shaped by India's requirements," Puri said today.

By Ruxandra Iordache