New Delhi — India will be looking to expand its oil refining capacity over the next few years, while embracing cleaner fuels such as natural gas, hydrogen and renewables to meet its insatiable appetite for energy, Prime Minister Narendra Modi told the inaugural session of the India Energy Forum by CERAWeek Oct 26.
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But India would have to meet its energy needs while keeping in mind the environmental needs, Modi said, adding that New Delhi was committed to reduce its carbon footprint sharply in coming years in order to battle climate change.
"We plan to grow our refining capacity from about 250 million mt per annum currently to 400 million mt by 2025," Modi said.
But on top of that, boosting domestic gas production was a key priority for the government, he said, adding that it was crucial for the country to achieve its ambitions of becoming a gas-based economy. The government has set a target of raising the share of gas in India's energy mix to 15% from 6% by 2030.
For the country to achieve its overall energy ambitions, India would need to accelerate the move toward gas, promote cleaner use of fossil fuels such as petroleum and coal, boost reliance on domestic resources for driving biofuels and embrace fuels such as hydrogen, Modi said.
While the world could witness a contraction in energy demand in the near-to-medium term because of the pandemic, India would swim against the tide and witness positive growth in energy demand, he added. "Our energy demand is set to double in the long term."
Challenges create opportunities
Petroleum Minister Dharmendra Pradhan said that while the coronavirus pandemic had hit the global economy, it had also created a unique opportunity to emerge stronger while recovering from the crisis.
"Our energy requirements in the coming years are bound to grow as our per-capita energy consumption is still far below the global average," Pradhan said.
"We are making concerted efforts and taking all necessary steps to make the energy sector fuel India's economic growth during the pandemic and in the post-COVID period. We are now on the road to full recovery of petroleum products consumption compared to pre-COVID levels," he added.
Pradhan's views echoed comments from Indian Oil Corp. Chairman Shrikant Madhav Vaidya who told S&P Global Platts that Indian oil demand was recovering faster than expected, with gasoline consumption already at pre-pandemic levels, and the upcoming festival reason is expected to give a further boost to overall oil-product consumption.
S&P Global Platts Analytics expects Indian oil demand to fall 530,000 b/d year on year to 4.5 million b/d in 2020, before rebounding by 500,000 b/d in 2021.
Modi said that for too long the world had seen crude prices on a roller coaster and there was a need to work toward transparent and flexible markets for both oil and gas.
On India's appetite for cleaner fuels, Modi said renewable energy would play a key role in its energy basket in the future.
"We are well on track to make the commitment we made to the global community. We had aimed to increase the renewable energy installed capacity by 175 GW by 2022. We have further extended this goal to 450 GW by 2030," he said.