India's Energy Sector Reforms Drive Surge in Gas Connections and Refining Capacity
Team Finance Saathi
19/Aug/2024
Key Points:
Growth in Piped Gas Connections: Piped gas connections in India surged to 1.32 crore in 2024, up from 25 lakh in 2014, reflecting major energy sector reforms.
Refining Capacity and Ethanol Blending: India’s refining capacity rose to 256.8 MMTPA in 2024, with ethanol blending in petrol increasing to 15%, driving sustainability.
Fuel Price Stability: India maintained steady fuel prices from January 2022 to July 2024, shielding the nation from global fuel price hikes through excise duty reductions.
Minister of Petroleum and Natural Gas, Mr. Hardeep Singh Puri, recently highlighted the significant strides made in India's energy sector over the past decade, showcasing the impact of major reforms that have enhanced energy availability, affordability, and sustainability. The most notable development is the sharp increase in piped gas connections, which soared to 1.32 crore in 2024 from just 25 lakh in 2014. This remarkable growth is a testament to the government's successful implementation of policies aimed at expanding energy access across the country.
Energy Sector Reforms and Their Impact:
In a social media post, Mr. Puri elaborated on the transformative journey of India’s energy sector, outlining five key strategies aimed at achieving energy independence. He emphasized that these strategies are rooted in robust policy frameworks, infrastructure expansion, and technological innovation, all of which have collectively contributed to the sector's remarkable growth.
Expanding Refining Capacity and Ethanol Blending:
Among the critical achievements in the energy sector is the increase in India's refining capacity. From 215 million metric tonnes per annum (MMTPA) in 2014, the country’s refining capacity has expanded to 256.8 MMTPA in 2024. This growth is crucial for meeting the rising demand for petroleum products, both domestically and internationally. The expansion of refining capacity not only enhances energy security but also positions India as a significant player in the global energy market.
Another noteworthy development is the increase in ethanol blending in petrol, which has reached 15% in 2024 compared to a mere 1.53% in 2014. This shift towards greater ethanol blending is part of India’s broader strategy to reduce carbon emissions and promote sustainable energy practices. Ethanol blending not only helps in reducing the country’s dependence on fossil fuels but also supports the agricultural sector by creating a stable demand for crops like sugarcane, which is used in ethanol production.
Surge in LPG Connections:
The number of LPG connections in India has seen an unprecedented rise, growing from 14.52 crore in 2014 to over 32.73 crore by August 1, 2024. This expansion includes a significant contribution from the Pradhan Mantri Ujjwala Yojana (PMUY), under which 10.33 crore connections have been provided to households across the country. The widespread availability of LPG connections has played a crucial role in improving the quality of life for millions of households, particularly in rural areas, by providing a cleaner and more efficient source of energy for cooking.
Expansion of the Natural Gas Pipeline Network:
Another critical aspect of India's energy sector transformation is the expansion of the natural gas pipeline network. From 15,000 km in 2014, the network has grown to 24,881 km in 2024, significantly enhancing the accessibility and distribution of natural gas across the country. This expansion is part of the government's broader initiative to increase the share of natural gas in the country's energy mix, thereby promoting a cleaner and more sustainable energy future.
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Maintaining Fuel Price Stability Amid Global Challenges:
One of the most significant achievements highlighted by Mr. Puri is India’s ability to maintain fuel price stability in the face of rising global fuel prices. Between January 2022 and July 2024, while many advanced nations experienced substantial increases in fuel prices, India managed to keep prices steady. This was largely achieved through excise duty reductions by the central government, which cushioned the impact of global price fluctuations on Indian consumers. Mr. Puri noted that this strategy has been instrumental in protecting the Indian economy and households from the volatility of global energy markets.
Petronet LNG's Dahej Terminal Expansion:
On August 14, 2024, Mr. Puri announced a significant development in India’s LNG infrastructure—the expansion of the Petronet LNG Dahej terminal in Gujarat. The terminal’s capacity has been increased from 17.5 MMTPA to 22.5 MMTPA, reinforcing India’s commitment to energy self-sufficiency. The Dahej terminal, which is the country’s largest single-location LNG storage and regasification facility, plays a critical role in meeting India’s growing demand for natural gas, especially in the industrial and transportation sectors.
The Road Ahead for India's Energy Sector:
Looking forward, the Indian government remains committed to further strengthening the energy sector through continuous reforms, infrastructure development, and policy innovation. The strategies outlined by Mr. Puri, including the emphasis on expanding refining capacity, enhancing the natural gas pipeline network, and promoting sustainable energy practices like ethanol blending, are set to play a pivotal role in achieving the country’s long-term energy goals.
India's energy sector is on a transformative path, driven by the twin objectives of meeting rising domestic demand and positioning the country as a key player in the global energy market. With ongoing efforts to expand infrastructure, promote sustainability, and maintain energy security, India is well on its way to achieving energy independence and realizing its broader vision of economic growth and development.
Conclusion:
Minister Hardeep Singh Puri’s emphasis on the significant advancements in India’s energy sector over the past decade underscores the impact of strategic reforms and infrastructure expansion. From the surge in piped gas and LPG connections to the expansion of refining capacity and the natural gas pipeline network, these developments have strengthened India’s energy security and sustainability. As the country continues to pursue its energy independence goals, the initiatives highlighted by Mr. Puri will play a crucial role in shaping the future of India’s energy landscape, ensuring that it remains resilient, sustainable, and capable of meeting the needs of its growing population.
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