Page 43 - Policy Economic Report - October 2025

POLICY AND ECONOMIC REPORT
OIL & GAS MARKET

on this success, the Government preponed the target for 20% blending from 2030 to 2025–26. The
Minister underlined that well-designed policies and robust support systems have enabled such
accelerated achievements, demonstrating India’s capability to set and meet ambitious energy goals.

Shri Puri also observed that India’s refineries are world-class, globally integrated, and export-ready.
India is already the fourth-largest refining nation and among the top seven exporters of petroleum
products, exporting to more than 50 countries worth over USD 45 billion in FY 2024–25. The refining
sector, he added, contributes nearly one-fifth of the country’s revenue, with both public and private
entities showing strong financial and operational performance. Domestic petroleum consumption has
increased from around 5 million barrels per day in 2021 to about 5.6 million barrels per day currently
and is expected to touch 6 million barrels per day soon, supported by India’s robust economic growth
and rising per capita income.

Referring to the growing integration of petrochemicals with refining, Shri Puri said that India’s
petrochemical utilization is still only about one-third of the global average, offering significant potential
for growth. The petrochemical intensity index has already risen from 7.7% to 13%, reflecting the sector’s
upward trajectory. He emphasized that new refinery expansions are being planned as integrated
petrochemical complexes to enhance efficiency, value addition, and export competitiveness.

The Minister also underlined the importance of innovation and indigenization in the energy ecosystem.
He said that India has achieved nearly 80% import substitution across the energy value chain. While
acknowledging that certain critical components such as catalysts and specialized equipment continue to
be imported, he emphasized the need for a balanced approach to Atmanirbharata, focusing on
efficiency and global competitiveness rather than complete self-containment. He added that the
government has initiated the Production Linked Incentive (PLI) scheme and established a National
Centre for Catalyst Research to promote R&D and domestic manufacturing in key energy technologies.

Speaking about green energy, Shri Puri noted that India’s progress in green hydrogen has been
particularly promising. Recent tenders by IOCL and HPCL have reduced the price of green hydrogen from
around USD 5.5/kg to nearly USD 4/kg, marking a major step toward commercial viability. He said that
green hydrogen, natural gas, and biofuels will be central to India’s energy transition, with the Global
Biofuels Alliance expected to catalyze international trade and adoption of biofuels, including Sustainable
Aviation Fuel (SAF).

Shri Puri stressed that India’s energy strategy encompasses both fuel and petrochemical growth as part
of a calibrated transition toward sustainability. He said that while the share of traditional fuels will
gradually reduce, they will continue to play a major role for decades as India moves toward its 2047
goals. Simultaneously, the share of natural gas in the energy mix is being raised from 6% to 15%, green
hydrogen is being scaled up, and renewables are expanding rapidly—all underlining India’s commitment
to meeting its climate goals without compromising energy security.

Recalling India’s historic refining legacy, from the first refinery at Digboi in 1901 to today’s global-scale
facilities, the Minister said that post-2014 reforms and ecosystem strengthening have unlocked a new
era of growth and innovation. He highlighted ongoing projects such as the Barmer Refinery and Andhra

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