India covers 85% of its oil consumption and 54.3% of its gas consumption through imports, according to Indian government data.
Globally, India is the third largest oil consumer, the fourth largest refiner and a net exporter of refined products.
As proven oil reserves are limited compared to domestic needs, Vedanta Limited expects India’s import dependence to increase significantly in the coming decades.
According to the IEA’s India Energy Policy Review 2021 report, increased vehicle ownership and road transport use are the main contributors to oil demand, and India’s transport energy consumption is projected to grow at an average annual rate of 4.4%, compared to the global average of 1.4% per year until 2040.
According to the DGH Annual Hydrocarbon Outlook, Fiscal Year 2020-2021, India’s conventional hydrocarbon resource potential is estimated at 42 BToe (unrisked), of which nearly 28% (12 BToe) is converted to in-situ volume through discoveries.
The remaining potential is in the undiscovered resource category.
With increasing demand and hence imports, India’s depleting energy security may become a major concern.
To utilize existing resources and lessen the burden of import bills, the government has prioritized reducing oil and gas imports, increasing domestic production activities, diversifying its sources of supply and increasing Indian investments in offshore oilfields in the Middle East and Africa.
The Indian government also aims to increase the share of natural gas in the country’s energy mix to 15% by 2030, from the current 6.7%, with the help of enabling policy interventions.
According to the April 2022 outlook of the International Energy Agency (IEA), global oil demand is expected to average 99.4 mb/d in 2022, up 1.9 mb/d from 2021.