High international oil prices to impede global economic recovery: Puri

The volatility of oil prices has led to a surge in the domestic prices of hydrocarbon fuels and has impacted the economy, leading to surge in inflation

India has warned that high international oil prices were likely to undermine the post-pandemic global economic recovery which required affordable and sustainable energy. Speaking at the India Energy Forum organised by CERAWeek (Cambridge Energy Research Associates) on Wednesday, petroleum and natural gas minister Hardeep Singh Puri also reaffirmed the country’s commitment to transition to clean energy.

Hardeep Singh Puri was speaking at the India Energy Forum organised by CERAWeek (Cambridge Energy Research Associates) on Wednesday. (Sanjeev Verma/HT PHOTO/File/Representative use)

As one of the top 5 energy consumers, India nudged Organization of the Petroleum Exporting Countries or OPEC nations to work towards affordable and reliable energy supplies in the backdrop of petrol and diesel prices hitting record highs across the country, partly due to the recent surge in international crude oil rates.

International Energy Agency earlier this year forecast India’s share of energy demand growth over the next two decades to outpace any other country as it is expected to rise by 74% to reach 8.7 million barrels per day by 2040 under the existing policies scenario. It also said that India’s net dependence on oil imports is set to increase to more than 90% by 2040.

Puri stated that India is currently 85% and 55% dependent on imported oil and gas respectively and that these form 20% of the country’s import bill. “The import bill of these items has almost gone up by almost three times in the last quarter compared to last year’s corresponding quarter,” he informed. The volatility of prices has led to a surge in the domestic prices of hydrocarbon fuels and has impacted the economy, leading to surge in inflation.

While stressing on the gravity of the rising prices, Puri described the situation as a “wakeup call” and warned that if prices are not brought under control, global economic recovery could be fragile.

The minister also reaffirmed India’s commitment to sustainable energy. “For promoting electric vehicles, thousands of charging stations are being installed … To usher in transition to green energy, Hydrogen Mission is being launched,” Puri said. He highlighted that India is accelerating its efforts to become a gas-based economy with cleaner use of fossil fuels, promotion of digital innovation across energy systems and with the aim to achieve the renewable energy target of 450 Gigawatts by 2030. “About $60 billion investment is underway in setting up the infrastructure including pipelines, terminals, and re-gasification facilities,” he added.

Reiterating the need for sustainability in the energy sector, Puri said, “Our energy consumption is set to rise as we move towards a US$ 5 trillion economy by 2025. Energy justice for India is a key objective and priority for our government. India comprises one-sixth of the global community and … for the (sustainable development goals) SDGs to succeed, India must succeed.”

Puri added that India views the energy sector as one that empowers people and furthers ease of living. He also described the year’s theme at the forum - Building India’s New Energy Future: Clean, Affordable, Reliable, Sustainable- as apt.

“It is well chosen because India’s energy transition has multiple dimensions, and its energy sector is undergoing a transformation with relentless focus on outcomes,” Puri said, according to a statement by the ministry of petroleum & natural gas.