Lok Sabha Question No. 4567 (UNSTARRED), answered on 2025-03-27
Subject: Rising Cost of Petroleum Imports
Ministry: PETROLEUM AND NATURAL GAS
Asked by: Dr. D Ravi Kumar

## LOK SABHA UNSTARRED QUESTION NO-4567 TO BE ANSWERED ON 27 th MARCH 2025

## Rising Cost of Petroleum Imports

4567. Dr. D Ravi Kumar:

## पेट Ō ोिलयम और Ůाक ृ ितक गैस मंũी

Will the Minister of PETROLEUM AND NATURAL GAS be pleased to state:

- (a) the measures taken/being taken by the Government to manage the rising cost of petroleum imports and the manner in which global crude oil price fluctuations impacted India's energy security;
- (b) whether the Government has faced any recent challenges related to petroleum imports due to  geopolitical  factors  or  supply  chain  disruptions,  if  so,  the  details  thereof  along  with  the steps being taken to ensure stable and affordable imports;
- (c) whether the United States Government has imposed or threatened to impose any tariffs on India's petroleum imports and if so, the details along with the impact thereof on the country's energy sector; and
- (d) the strategies being adopted by the Government to reduce dependency on imported crude oil and strengthen domestic petroleum production and refining capacity?

## ANSWER

## पेट Ō ोिलयम और Ůाक ृ ितक गैस मंũालय मŐ राǛमंũी ( ŵी सुरे श गोपी )

## MINISTER OF STATE IN THE MINISTRY OF PETROLEUM AND NATURAL GAS (SHRI SURESH GOPI)

- (a)  to  (b)  Various  steps/measures  have  been  taken  by  Government  and  Public  Sector Undertaking (PSUs) Oil Marketing Companies (OMCs) to mitigate the burden on consumers of higher crude prices which, inter-alia, include:
- i. Reduction of Central Excise duty by the Central Government by a total of Rs. 13/litre and Rs.  16/litre  on  petrol  and  diesel  respectively  in  two  tranches  in  November  2021  and May2022, which was fully passed on to consumers. Some State Governments also reduced VAT rates to provide relief to citizens. In March, 2024, OMCs also reduced the retail prices of petrol and diesel by Rs. 2 per litre each, across the country.
- ii. Insulating common citizens from high international prices by diversifying the crude import basket,  invoking  the  provisions  of  Universal  Service  Obligation  to  ensure  availability  of petrol & diesel in domestic market, increasing the blending of ethanol in petrol, etc.

iii.  Intra-state freight rationalisation by PSU OMCs which has benefitted consumers located at remote areas within the states. This initiative has also reduced the difference between the maximum and minimum retail prices of Petrol or Diesel within a state.

iv. Subsidized domestic LPG cylinder made available to more than 10.33 crore PM Ujjwala Yojana beneficiaries, across the country. A few State Governments are also providing some additional  subsidy  on  LPG  refills  and  bearing  the  additional  cost  from  their  respective budgets.

Government is closely monitoring global energy markets as well as potential energy supply disruptions  as  a  fall-out  of  the  evolving  geopolitical  situation.  To  ensure  security  of  crude supplies and to mitigate the risk of dependence on crude oil from single region, Public Sector Undertakings (PSUs) have diversified their petroleum import basket and are procuring crude from countries located at various geographical locations.

(c)  The  United  States  of  America  (USA)  is  now  India's  6 th largest  energy  trade  partner, including  the  5 th largest  source  of  crude  oil  and  the  2 nd largest  source  of  LNG  imports. Bilateral hydrocarbons trade between India and the U.S. has been US$ 13.7 billion in 202324.

During the visit of the Prime Minister of India to the U.S. in February 2025, in the India-U.S. Joint Statement, the leaders reaffirmed their commitment to increase energy trade, as part of efforts to ensure energy security, and to establish the United States as a leading supplier of crude oil and petroleum products and liquified natural gas to India. Both sides underscored the tremendous scope and opportunity to increase trade in the hydrocarbon sector including natural gas, ethane and petroleum products as part of efforts to ensure supply diversification and energy security.

Moreover, the India-U.S. Joint statement also announced plans to negotiate the first tranche of a mutually beneficial, multi-sector Bilateral Trade Agreement (BTA) by fall of 2025. To advance  this  innovative,  wide-ranging  BTA,  the  U.S.  and  India  will  take  an  integrated approach to strengthen and deepen bilateral trade across the goods and services sector, and will  work  towards  increasing  market  access,  reducing  tariff  and  non-tariff  barriers,  and deepening supply chain integration.

(d) Government has adopted a multi-pronged strategy to reduce the dependency on crude oil which, inter  alia, include  demand  substitution  by  promoting  usage  of  natural  gas  as fuel/feedstock across the country towards increasing the share of natural gas in economy and moving towards gas based economy, promotion of renewable and alternate fuels like ethanol, second generation ethanol, compressed bio gas and biodiesel, refinery process improvements, promoting  energy  efficiency  and  conservation,  efforts  for  increasing  production  of  oil  and natural gas through various policies initiatives, etc. For promoting the use of Compressed Bio Gas (CBG) as automotive fuel, Sustainable Alternative Towards Affordable Transportation (SATAT) initiative has also been launched. To meet the growing  energy  demand, India is strengthening  its  refining  capacity  to  309.5  MMTPA  by  2030  to  meet  the  domestic consumption.

The  government  has  been  taking  various  steps  to  boost  domestic  oil  and  gas  production which, inter-alia , include:

- i. Policy under PSC regime for early monetization of hydrocarbon discoveries, 2014. ii. Discovered Small Field Policy, 2015. iii. Hydrocarbon Exploration and Licensing Policy (HELP), 2016. iv. Policy for Extension of PSCs, 2016 and 2017. v. Policy for early monetization of Coal Bed Methane, 2017. vi. Setting up of National Data Repository, 2017. vii. Appraisal of Un-appraised  areas in Sedimentary  Basins  under National Seismic Programme, 2017. viii. Policy framework for extension of PSCs for Discovered Fields and Exploration Blocks under Pre-New Exploration Licensing Policy (Pre-NELP), 2016 and 2017. ix. Policy to Promote and Incentivize Enhanced Recovery Methods for Oil and Gas, 2018. x. Policy Framework for exploration and exploitation of Unconventional Hydrocarbons under Existing  Production  Sharing  Contracts  (PSCs),  Coal  Bed  Methane  (CBM)  Contracts  and Nomination Fields, 2018. xi. Natural Gas Marketing Reforms, 2020. xii.  Lower  Royalty  Rates,  Zero  Revenue  Share  (till  Windfall  Gain)  and  no  drilling commitment in Phase-I in OALP Blocks under Category II and III basins to attract bidders. xiii.  Release  of  about  1  Million  Sq.  Km.  (SKM)  'No-Go'  area  in  offshore  which  were blocked for exploration for decades. xiv. Government is also spending about Rs.7500 Cr. for acquisition of seismic data in onland and  offshore  areas  and  drilling  of  stratigraphic  wells  to  make  quality  data  of  Indian Sedimentary Basins available to bidders. Government has approved acquisition of additional 2D Seismic data of 20,000 LKM in onland and 30,000 LKM in offshore beyond Exclusive Economic Zone (EEZ) of India.

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