February 08, 2024 [S&P Global]- India managed to successfully navigate volatile oil markets by planning its oil imports carefully from new sources and ensuring required investments in the refining sector, polices which have helped to overcome the issue of limited strategic oil storage availability in the country, petroleum minister Hardeep Singh Puri said.
“India, despite having no large oil reserves of its own, has managed to successfully develop a large oil industry by strategic planning and investments in the refining sector. Last fiscal year, crude oil was India’s biggest import item, while petroleum products made up the largest share of exports,” Puri told the conference.
India’s strategic petroleum reserves, managed by Indian Strategic Petroleum Reserves Ltd., has a capacity of 5.33 million mt, providing for about 9.5 days of total net oil imports. In addition, state oil companies hold storage facilities for crude oil and petroleum products for 64.5 days of total net imports. Hence, the current total national capacity for storage of crude oil and petroleum products stands at 74 days of total net imports, according to the parliamentary panel report.
On the other hand, IEA member countries are required to ensure oil stock levels equivalent to no less than 90 days of their net imports.
“Even as we transition, we have to ensure that flow of traditional energy is not disrupted. Because of the pragmatic policies of the honorable prime minister, India has played a crucial role of a unifier in a deeply divided world and ensure that the flow of energy is not disrupted,” the minister said.
Puri added that if crude oil prices remained stable it would serve the interest of both oil producing and consuming countries.
“In the foreseeable future, that is the year 2024, I don’t see any difficulties in crude availability,” the minister said. “Saudi Arabia is producing less than its capacity. However, the market already has enough oil to meet demand.”
India’s crude imports rose 2.4% on the year to 233.38 million mt, or 4.7 million b/d, the latest provisional data from the country’s Petroleum Planning and Analysis Cell showed.
In December 2023, India’s crude oil imports from Russia averaged 1.43 million b/d, reflecting a decline of 150,000 b/d compared with November and a significant drop of 620,000 b/d from the peak in May, which marked India’s highest monthly imports from Russia, according to S&P Global Commodity Insights data.
“Even though imports have slipped slightly, India is still importing around 30% of its crude requirements from Russia,” Puri told reporters. “This was 0.2% before the Russia-Ukraine war.”
Despite that, Russia emerged as the biggest crude supplier to India in 2023, a trend likely to remain intact in early 2024 despite the recent Red Sea attacks causing diversions and higher shipping costs. Russia contributed over 35% of India’s total crude imports in 2023, amounting to 1.7 million b/d, S&P Global data showed.
Puri said that the global energy sector was at a crucial juncture, as there was a need to effectively address the pressing global energy challenges of ensuring energy availability, affordability, and sustainability while prioritizing energy security.
“We all need to come together and join hands for defining an energy agenda which is inclusive, market driven, and climate-sensitive,” Puri said.
Highlighting the price volatility in recent years — crude prices rose to around $120/b in June 2022 — Puri said the Indian government ensured that prices of petrol and diesel remained affordable for retail consumers during that period.
Puri said India’s flagship domestic energy schemes, such as the Pradhan Mantri Ujjwala Yojana, National Biofuels Policy and National Green Hydrogen Mission, along with global initiatives such as the International Solar Alliance and Global Biofuels Alliance, garnered global appreciation, support, and adoption.
“These initiatives collectively aim to ensure affordable energy access for citizens on a global scale. The Global Biofuels Alliance will help in accelerating inclusive energy transition for a sustainable world. Biofuels is unique as it is decentralized, it gives money to the people and is clean for environment,” Puri said.
“India is ready to collaborate with partner countries in replicating our strategies and solutions across both conventional and non-conventional energy sources, contributing to the creation of a sustainable global energy model,” he added.
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