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The ongoing West Asia crisis has the potential to worsen as tensions between the US and Iran have escalated in recent weeks, Hardeep Singh Puri, Union minister of petroleum and natural gas, said on Thursday. India has successfully navigated the ongoing crisis so far, but an escalating conflict might pose challenges going forward, the minister added.
“The crisis is certainly not over. It is not only ongoing but it has potential of exacerbating. Every crisis also presents itself as a challenge, and an ingrained opportunity. We have been able to successfully negotiate and navigate our way, and insulate ourselves from the worst part of the crisis thus far. Having said that, I cannot say that if the crisis exacerbates, we can still continue,” said Puri at the Public Affairs Forum of India (PAFI) 13th Annual Forum.
Availability of crude in the international market was not an issue for India as the global supply of 102 million barrels per day (bpd) exceeds demand of 94-95 million bpd. However, closure of chokepoints, including the Strait of Hormuz and Bab-el-Mandeb, amid the West Asia crisis would create supply challenges, Puri said.
India’s robust refining capacity of 267 million tonnes per annum (mtpa) helped ensure fuel availability in the country despite supply challenges at the peak of the war, Puri said. The refining capacity is expected to be ramped up to 320 mtpa by 2030.
Countries including Saudi Arabia and the United Arab Emirates (UAE) are also interested in investing in India’s upcoming refineries, subject to meaningful investment returns. “Nobody wants to come and invest in a refinery ??unless they can also get a slice of your growing downstream market,” said Puri.
India is also exporting around 1 million barrels of refined fuel products, despite several countries such as Russia and China imposing export bans. India plans to continue exporting petroleum products under contractual commitments, the minister said.
Addressing concerns over ethanol blending with petrol, Puri said the government does not plan to increase blending beyond 20 per cent amid growing consumer worries.
