India To Increase Share Of Domestic Gas To 16% In Energy Mix Seeing Challenges In Global Supplies

(MENAFN- KNN India) New Delhi, Apr 1 (KNN) The government of India has implemented reforms to increase the share of gas to 16 per cent in the energy mix by 2030, including mandatory biogas blending, expanding the city gas distribution network, and setting up more LNG terminals.

India's energy sector faced several hurdles in the fiscal year 2023-24, marked by rising crude oil prices, geopolitical tensions, demand and supply disruptions, and stagnant domestic production.

The country's oil and gas production saw muted growth, leading to increased dependency on imports reaching 87.7 per cent till February 2024. However, the import bill declined due to discounts from Russia, the top supplier.

Looking ahead to FY2024-25, analysts project crude oil prices in the USD 75-USD 95 per barrel range and don't foresee major profitability impact on OMCs due to healthy gross refining margins. However, if prices remain elevated, under-recoveries could resurface.

Domestic natural gas production is expected to pick up, with around 15 MMSCM per day of new production anticipated in FY2024-25, reducing India's LNG import dependency from the current 45 per cent.

As the year drew to a close, the upcoming general elections prompted the government to take measures like reducing prices of LPG cylinders and auto fuels, moves considered unfriendly to market forces.

Global crude prices remained volatile, hitting the marketing margins of India's top oil marketing companies (OMCs).

Factors like the Israel-Hamas conflict, tensions in the Red Sea, and output cuts by OPEC+ contributed to the price fluctuations.

While OMCs enjoyed healthy profits in the first three quarters offsetting previous losses, a recent spurt in crude prices coupled with the fuel price cut can pose profitability concerns.

(KNN Bureau)

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