India’s dependence on imported crude oil and pure fuel grew additional in 2024-25 (FY25) because the hole between consumption development and subdued home hydrocarbon manufacturing continued to widen. The nation’s oil import dependency for the complete monetary 12 months touched yet one more report excessive, whereas reliance on imported pure fuel was at a four-year excessive, per newest knowledge from the petroleum ministry.
India’s oil import dependency for the monetary 12 months ended March was 88.2 per cent, up from 87.8 within the earlier fiscal (FY24), as per provisional knowledge from the oil ministry’s Petroleum Planning & Evaluation Cell (PPAC). Import dependency within the case of pure fuel was at 50.8 per cent in FY25, up from 47.1 per cent in FY24.
India’s power demand has been rising swiftly, leading to rising crude oil and pure fuel imports. That is fuelled by elements like rising energy-intensive industries, elevated automobile gross sales, a quickly increasing aviation sector, rising consumption of petrochemicals, and a rising inhabitants.
Rising reliance on imported oil and pure fuel
Reliance on imported oil has been rising repeatedly over the previous few years, besides in FY21, when demand was suppressed as a result of COVID-19 pandemic. The nation’s oil import dependency stood at 87.8 per cent in FY24, 87.4 per cent in FY23, 85.5 per cent in FY22, 84.4 per cent in FY21, 85 per cent in FY20, and 83.8 per cent in FY19.
India is the world’s third-largest client of crude oil and excessive import dependency makes the Indian financial system weak to international oil worth fluctuations. It additionally has a bearing on the nation’s commerce deficit, international alternate reserves, the rupee’s alternate price, and inflation price, amongst others. The federal government needs to cut back India’s reliance on imported crude oil however sluggish home oil output within the face of incessantly rising demand for petroleum merchandise has been the largest obstacle.
As for pure fuel, the federal government needs to extend its consumption and share within the nation’s major power combine to fifteen per cent by 2030 from over 6 per cent at current. The rationale behind the push for pure fuel, despite the fact that it could result in increased imports of the gas, is quite easy.
Pure fuel is way much less polluting than standard hydrocarbons like crude oil and coal, and is often cheaper than oil. Additionally it is seen as a key transition gas. To make certain although, the federal government has additionally been pushing India’s oil and fuel firms to extend home manufacturing of pure fuel in a bid to maintain import dependency ranges beneath test.
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India’s crude oil imports rose to 242.4 million tonnes in FY25 from 234.3 million in FY24, whereas home manufacturing declined barely to twenty-eight.7 million tonnes from 29.4 million tonnes, per PPAC knowledge. The nation’s gross oil import invoice for the monetary 12 months rose almost 3 per cent year-on-year to $137 billion.
Pure fuel imports rose 15.4 per cent year-on-year to 36.7 billion cubic metres (bcm) in FY25, and price $15.2 billion towards $13.4 billion a 12 months in the past. Home pure fuel output in FY25 was 35.6 bcm, barely decrease than 35.7 bcm in FY24.
Complete home consumption of petroleum merchandise in FY25 was 239.2 million tonnes, of which simply 28.2 million tonnes got here from domestically produced crude oil, leading to a self-sufficiency degree of 11.8 per cent, per PPAC knowledge. As for pure fuel, the full home consumption in FY25 was 72.3 bcm, whereas imports stood at 36.7 bcm.
In early 2015, the federal government had set a goal to cut back reliance on oil imports to 67 per cent by 2022 from 77 per cent in 2013-14, however the dependency has solely grown since. Chopping pricey oil imports continues to be a key focus space for the federal government, which has taken various coverage measures to incentivise investments in India’s oil and fuel exploration and manufacturing sector.
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Lowering oil imports can be one of many basic aims of the federal government’s push for electrical mobility, biofuels, and different different fuels for transportation in addition to industries. Whereas there was a pick-up in electrical mobility adoption and mixing of biofuels with standard fuels, it isn’t sufficient to offset petroleum demand development.