India has ‘insulated' itself from the 'turbulence' of crude supply shock: Hardeep Singh Puri

India has so far insulated itself from disruptions to crude oil and natural gas supplies caused by the West Asia crisis and volatility in the Strait of Hormuz, Union Petroleum Minister Hardeep Singh Puri said on Monday, while warning that logistics and distribution remain a key challenge for global energy markets.

"So far we have navigated that uncertainty. In fact, I would say we have insulated ourselves from the turbulence," Puri said at an event organised by the Merchants' Chamber of Commerce and Industry.

Also read: India's Russian crude imports fall to five-month low as refiners diversify supplies


"Going forward, it constitutes a challenge. But I can assure you, we won't let things get out of control," he said.

Puri said there was no global shortage of crude oil, with around 104 million barrels available daily against global consumption of about 94 million barrels. The bigger problem, he said, was moving supplies through disrupted and volatile shipping routes.

The West Asia crisis and the current distribution of shipping routes are affecting about 40% of energy movement, Puri said, pointing to the Strait of Hormuz as a key vulnerability.

"Every challenge, every crisis, poses a challenge. Every challenge has in it an opportunity, and that opportunity we will utilise," he said.

India widens crude sourcing to 41 countries

Puri said India had expanded its crude sourcing network to 41 countries from 27 earlier, reducing its dependence on supplies from any single region.

He noted that Qatar, the UAE and Saudi Arabia, three major energy suppliers to India, are located in or around the conflict zone arising from the war on Iran.

Rerouting crude shipments through the Red Sea also carries risks, Puri said, as attacks by Houthi forces could threaten shipping lines in the region.

The minister said LPG availability was his most critical concern as India's dependence on the fuel has risen sharply. The number of domestic LPG connections has increased from 14 crore in 2014 to 33.5 crore, he said.

To strengthen domestic supplies, India has increased daily LPG production to 54,000 metric tonnes from 34,000 metric tonnes, while also encouraging consumers to shift to alternative energy sources where possible.

Also read: India to continue diesel exports despite US ban threat, says Hardeep Singh Puri amid global fuel crunch

'Availability at all times'

Puri said the government's approach was to ensure "availability at all times along with affordability".

He said central excise duties on fuel had been cut three times, in November 2021, May 2022 and March 10, 2026. The latest reduction lowered petrol and diesel prices by Rs 10 per litre, he said.

Public sector oil marketing companies were facing under-recoveries of around Rs 530 crore a day, Puri said, adding that the government had provided financial support to them.

India's energy demand is currently growing at three times the global average, driven by its economic performance, he said. The petroleum sector contributes about 19% of total tax revenues, making energy management significant for the wider economy.

Puri also said the GOBARdhan (Galvanising Organic Bio-Agro Resources Dhan) Scheme will be unveiled on October 1.

The unified national circular bioenergy initiative has a Rs 23,731 crore outlay and aims to convert cattle dung, crop residue and municipal organic waste into clean Compressed Biogas (CBG) and organic manure.

(With inputs from PTI)