Despite a decline in dependence on primary energy imports, India remains highly dependent, at a massive 90%, on crude oil imports for its consumption, a new industry report has shown.
India’s dependence on primary energy imports fell to 42% in the financial year 2025 from 47% in FY 2017, according to a joint report by the Confederation of Indian Industry (CII) and EY.
However, India remains highly dependent on crude oil imports, with 90% of all demand met by purchases from overseas, the report noted.
“Overall primary energy import dependence has reduced modestly from 47% to around 42% between FY17 and FY25, indicating gradual diversification of the energy system despite persistent dependence on imported oil,” media quoted the report as saying.
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India, the world’s third-largest crude oil importer, has seen its dependence on crude oil imports steadily rising in recent years amid soaring demand and falling domestic production.
The Middle East crisis sent Indian refiners scrambling for alternatives and the government looking to expand strategic storage sites to hold more reserves to cushion the next supply shocks.
India’s state-owned Oil and Natural Gas Corporation (ONGC), the top explorer in the country, will build a new storage site at Mangaluru to hold about 13 million barrels of oil.
In the wake of the Iran war and the disrupted crude flows at the Strait of Hormuz, India found itself in search of alternatives to replace the lost Middle Eastern supply. Record crude oil imports from Russia have helped cushion the blow, but India realized it needs additional storage sites to hold commercial and strategic reserves.
India is one of the biggest crude oil importers, but also one of the most exposed to supply shocks as its current maximum reserve capacity can cover only eight days of national oil demand.
Meanwhile, India’s state-run refiners continue their buying spree of crude from West Africa as the Middle East crisis has sapped supply and made deliveries uncertain.
By Tsvetana Paraskova for Oilprice.com
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