Hardeep Puri’s Oil Masterstroke: Lower Prices, Higher Hopes for India

India’s Oil Minister Hardeep Singh Puri has reassured consumers that the government is taking proactive steps to keep oil prices stable and affordable, even amidst the ups and downs of global markets. During his speech at the CII Annual Business Summit and in recent consultative meetings, Puri detailed a range of actions and reforms aimed at protecting Indian consumers from global price fluctuations and ensuring energy security.

 

Key Highlights:

- Stable Global Oil Prices: Puri anticipates that global crude oil prices will stabilize around $65 per barrel, marking a 10% decrease from last year, thanks to abundant supplies and increased production from countries like Brazil, Guyana, Suriname, Canada, and Argentina.

- Strategic Oil Reserves: The government has set aside ₹5,600 crore in the current budget to enhance India’s Strategic Petroleum Reserves, taking advantage of lower prices to strengthen national energy security.

- Boosting Domestic Production: More than 1 million sq km of sedimentary basins, previously designated as ‘no-go’ zones, have been opened up for exploration, attracting over 37% of new bids under the Open Acreage Licensing Policy (OALP).

- Fuel Price Relief: Central excise duties on petrol and diesel were reduced by ₹13/litre and ₹16/litre respectively in two phases, with these cuts fully benefiting consumers. Oil Marketing Companies (OMCs) also lowered retail prices by ₹2/litre in March 2024.

- LPG Subsidies and Access: LPG coverage has grown from 55% in 2014 to nearly universal access. Thanks to the Pradhan Mantri Ujjwala Yojana (PMUY), over 10.33 crore beneficiaries now receive subsidized cylinders, with PMUY users paying just ₹553 for a 14.2 kg cylinder—one of the lowest rates globally.

- Biofuel and Green Hydrogen Push: Policy reforms are promoting increased ethanol blending in petrol and setting ambitious targets for green hydrogen, which helps reduce import dependency and supports cleaner energy initiatives.

- Refining Capacity Expansion: India’s refining capacity is projected to grow from 260 million tonnes per annum to 309.5 million tonnes by 2028, positioning the country as a major player in the global energy landscape.

 

These measures, Puri emphasized, have allowed India to navigate global energy uncertainties, keep domestic fuel prices among the lowest in the world, and protect consumers from inflationary pressures.

 

Source: Economic Times, NDTV Profit, The Hindu BusinessLine, PIB, The Week, Energy Economic Times