India, the world’s third-largest energy consumer, will buy oil wherever it can get it on a predictable and sound basis, Oil Minister Hardeep Singh Puri said on Monday, stressing that the country would play its market card.
Last year, India avoided Western pressure to increase imports from Russia. Russia, whose oil is available at reduced prices due to sanctions imposed by some Western countries, is now India’s largest oil supplier.
“I will be very frank, we will play the market card,” he said during India Energy Week. “We will import from wherever it is available on a predictable and solid basis.”
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Of just 0.2% of all oil imported by India, Russia supplied 28% in January.
In addition to diversifying its sources of supply, India is rapidly moving towards alternative energy sources.
“And we are dramatically increasing our transition to green energy, meaning biofuels, compressed biogas, green hydrogen, etc.,” he said.
Puri said energy security means at least availability, supply, predictability, stability and affordability.
“But if the global system is facing what can only be called a crisis, or in this case you’ve had multiple crises – food, fertilizer and fuel – and the amount of energy available for the 100 million of bpd needed for consumption, for example, is less than 1 to 2 million barrels, then prices will skyrocket,” he said.
Countries that don’t have the bandwidth to buffer this kind of mismatch are the most vulnerable, he said.
India used a combination of tax cuts and price freezes to protect consumers from soaring energy prices following Russia’s invasion of Ukraine.
“So from my point of view, in a great democracy like India where 60 million people go to the gas pump every morning to fill up, where 5 million barrels of crude are consumed in a day, security energy means not having to worry about whether that crude will be available or not.
“And I think we were able to manage that. Now let’s come to the price. We were able to manage at the height of the crisis because the central government took a hit and lowered their excise duty on petrol and diesel twice – in November 2021 and May 2022,” he said.
Puri said the government will ensure that the country does not face the same situation again.
“We are significantly increasing our exploration and production area, we are entering into long-term supply agreements, and since we are the world’s third largest consumer,” he said.
Energy security, he said, has far more ramifications for countries that are non-oil producers, heavily dependent on imports, and whose economic situation at the time means that high energy prices could have the effect of derailing their economy.