India, as one of the world’s largest consumers of crude oil, has been actively working to reduce its dependence on imported oil while promoting domestic production, diversifying its energy sources, and adopting cleaner alternatives. The government has taken significant policy measures to enhance energy security and mitigate the financial impact of fluctuating global oil prices.
Modi’s Policy Reforms to Reduce Dependence on Imported Crude Oil
The volatility of global crude oil prices significantly impacts domestic fuel costs. The government and Public Sector Undertaking (PSU) Oil Marketing Companies (OMCs) have taken the following steps to cushion the burden on consumers:
- Reduction in Excise Duty: The government reduced central excise duty on petrol and diesel by Rs. 13/litre and Rs. 16/litre, respectively, in two phases (November 2021, May 2022). In March 2024, PSU OMCs further lowered petrol and diesel prices by Rs. 2 per litre each.
- Diversification of Crude Import Basket: Efforts have been made to source crude oil from multiple countries to reduce supply risks.
- Increased Ethanol Blending in Petrol: Ethanol blending in petrol has reached record levels, helping to lower fuel costs and reduce carbon emissions.
- Freight Rationalization: Optimization of fuel transportation within states to lower price disparities between regions.
- Subsidized LPG Cylinders: Over 10.33 crore beneficiaries under the PM Ujjwala Yojana receive subsidies on LPG refills, reducing household fuel costs.
Advancing Towards a Sustainable Future
The Indian government has implemented various policies and technological advancements to reduce reliance on crude oil, lower carbon emissions, and transition toward cleaner energy sources. These initiatives aim to promote sustainability, energy efficiency, and long-term economic benefits.
1. Ethanol Blending Program (EBP)
Ethanol blending in petrol is a crucial step in reducing carbon emissions and lowering India’s dependence on imported crude oil. Over the past decade, increased ethanol blending has helped cut approximately 578 lakh metric tonnes of CO₂ emissions. The government aims for 20% ethanol blending (E20) by 2025, advancing from 10% (E10) achieved in 2022. Ethanol is produced from agricultural residues such as sugarcane and maize, providing an additional income source for farmers and reducing air pollution from stubble burning.
2. Bharat Stage (BS) VI Fuel Norms
To combat vehicular pollution, India transitioned from BS IV to BS VI fuel norms in 2020. BS VI fuel is ultra-low sulfur fuel, reducing harmful emissions from vehicles. Vehicles using BS VI fuel emit 80% less sulfur and significantly fewer nitrogen oxides compared to BS IV. This transition aligns India with global emission standards and improves air quality in urban centers.
3. Biofuels and Renewable Energy (Pradhan Mantri JI-VAN Yojana)
The Pradhan Mantri JI-VAN (Jaiv Indhan- Vatavaran Anukool Fasal Awashesh Nivaran) Yojana was launched to promote second-generation (2G) ethanol production from agricultural waste and residues. The scheme aims to reduce stubble burning, enhance energy security, and boost rural employment by setting up 12 commercial-scale bio-ethanol refineries across India. This initiative encourages sustainable energy use and reduces dependency on fossil fuels.
4. Green Hydrogen Production
Green hydrogen, produced using renewable energy sources like solar and wind, is emerging as a key alternative to fossil fuels. Oil PSUs (Public Sector Undertakings) like Indian Oil, NTPC, and ONGC are investing in green hydrogen projects. Under the National Green Hydrogen Mission, India aims to become a global hub for green hydrogen production, with a target of 5 million metric tonnes (MMT) of green hydrogen production by 2030. Green hydrogen can power industries like steel, cement, and transportation, significantly reducing carbon footprints.
5. Expansion of EV Charging Infrastructure
To accelerate the adoption of electric vehicles (EVs), the government is developing an extensive EV charging network across India. Key initiatives include the FAME II Scheme (Faster Adoption and Manufacturing of Electric Vehicles), which offers incentives for EV buyers and promotes charging infrastructure. The Energy Efficiency Services Limited (EESL) initiative is deploying EV chargers in cities and highways, while new regulations mandate EV-ready parking spaces in urban areas. Increased EV adoption reduces demand for petrol and diesel, helping lower oil imports and emissions.
6. Energy Efficiency & Gas-Based Economy
India is expanding the use of natural gas as a cleaner alternative to coal and petroleum-based fuels. The government aims to increase the share of natural gas in India’s energy mix from 6% to 15% by 2030. Efforts include the expansion of City Gas Distribution (CGD) projects, which provide piped natural gas (PNG) and compressed natural gas (CNG) for households and vehicles, as well as the development of LNG terminals and pipelines to enhance supply chains for industrial and transportation sectors. Natural gas reduces carbon emissions by 25% compared to coal and 50% compared to petroleum-based fuels, encouraging a shift to cleaner transportation fuels like CNG and LNG.
These government initiatives represent a multi-pronged approach toward reducing India’s dependence on crude oil imports while enhancing energy security and environmental sustainability. By expanding renewable energy, ethanol blending, green hydrogen, EV infrastructure, and natural gas use, India is moving towards a cleaner and self-sufficient energy future.
India’s multi-pronged approach to reducing crude oil imports includes policy-driven exploration incentives, consumer price stabilization measures, and the promotion of alternative fuels. By enhancing domestic production, optimizing fuel consumption, and embracing renewable energy, the country is steadily moving toward greater energy independence and environmental sustainability. These efforts are not only strengthening national energy security but also contributing to India’s long-term economic resilience and climate goals.
