Increasing oil and gas exploration tool India to enter the global energy market (report)

Increasing oil and gas exploration tool India to enter the global energy market (report)
Increasing oil and gas exploration tool India to enter the global energy market (report)
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India is on track to shift to alternative energy sources such as green hydrogen, along with its endeavors to increase domestic oil and gas exploration, while diversifying its basket of imports to maintain stable supply and energy security.

And Indian Oil Minister Hardeep Singh Puri expected, on January 22, 2023, that his country would contribute to a quarter of the growth in energy demand in the world, during the next two decades, according to a report seen by the specialized energy platform.

Although India depends on imports to meet 85% of its oil needs and 50% of its natural gas needs; It mixes ethanol extracted from sugar cane and agricultural products with gasoline, to reduce imports from abroad.

Puri said that his country will achieve 20% of blending ethanol into gasoline by 2025, according to what was published by the Business Standard website.

He added, “Our strategy for energy security is based on 4 pillars: diversifying energy supplies, increasing oil and gas exploration and production activities, using alternative energy sources, and achieving an energy transition through a gas-based economy, green hydrogen, and electric vehicles.”

It should be noted that India increased the number of crude oil suppliers from 27 countries in 2006 and 2007 to 39 countries in 2021 and 2022, adding new suppliers such as Colombia, Russia, Libya, Gabon, Equatorial Guinea and others.

Crude oil extracted from the ground in India is refined to produce fuels such as gasoline and diesel. Natural gas is used to generate electricity, make fertilizers, and convert it into compressed natural gas to power cars and pipe it into homes for cooking.

Rising global energy prices

After the Russian invasion of Ukraine, energy prices rose globally, but consumers in India were largely unaffected. Because state-owned retail companies did not raise prices commensurate with the boom.

Indian Oil Minister Hardeep Singh Puri said: “Diesel prices, the most used fuel in the country, rose by only 3% between December 2021 and December 2022.

Indian Oil Minister Hardeep Singh Puri. Photo courtesy of Business Standard

He explained that diesel prices rose by 34% in the United States, 36% in Canada, 25% in Spain and 10% in the United Kingdom.

The price of diesel in India rose from 86.67 rupees ($1.07) per liter in December 2021 to 89.62 rupees ($1.11) a year later. The price of petrol rose from 95.41 rupees ($1.18) per liter to 96.72 rupees ($1.19).

(1 Indian Rupee = 0.012 USD)

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The reduction in excise duty mitigated the increase; The government raised excise duty on gasoline by 13 rupees per liter and on diesel by 15 rupees per liter in 2020 when the pandemic weakened global energy prices.

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This rise was reversed in two batches, in November 2021 and May 2022, according to what was seen by the specialized energy platform.

In turn, some Indian states are reducing value-added tax or local sales tax on fuel to help consumers.

Minister Puri said the government aimed to increase the exploration area in India to 0.5 million square kilometers by 2025 and 1 million square kilometers by 2030.

Exploration of large areas will lead to more discoveries. This increases domestic oil and gas production and reduces dependence on imports.

India also increased blending of ethanol into gasoline from 1.53% in 2013-2014 to 10.17% in 2022 and advanced its target of achieving 20% ​​blending of ethanol into gasoline from 2030 to 2025-26.

alternative energy sources

The Indian government is complementing the energy supply by establishing compressed biogas plants that use animal and agricultural waste to produce gas, according to the Business Standard website on January 22.

Indian Oil Minister Hardeep Singh Puri said that India aims to produce at least 5 million tons per year of green hydrogen by 2030.

He added that fuel merchants are preparing alternative sources of energy such as charging electric vehicles, compressed natural gas and liquefied petroleum gas at 22,000 petrol pumps by May 2024.

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