PUBLIC-PRIVATE ENERGY SECURITY INDIA

Why In News?

India's crude oil import dependence hit a record 88.7% in FY 2025-26, up from 85.5% five years earlier, even as domestic production declined.

What Is Energy Security?

Energy security means ensuring reliable, affordable, accessible, and sustainable energy supply to meet a country's economic and household needs at all times.

• Reliable supply means minimal disruption risk, even during geopolitical conflict or shipping-route blockages.

• Affordable energy protects households and industry from extreme price volatility that can trigger inflation.

• Accessible energy ensures energy reaches every region and income group, not just urban or industrial centres.

• Sustainable energy balances current supply needs against long-term environmental and climate commitments.

Why Is Energy Security Important for India?

High import dependence: India's crude oil import dependence has risen steadily from 85.5% in 2021-22 to a record 88.7% in 2025-26, even as domestic crude production fell from 29.7 million metric tonnes (MMT) to 28.0 MMT over the same five years. (Source: Ministry of Petroleum)

Growing energy demand: the International Energy Agency (IEA) projects India will be the largest contributor to incremental global energy demand growth in the coming decades.

Industrial development: manufacturing and petrochemical growth directly depend on assured petroleum and gas feedstock availability.

Transport sector: road transport remains dependent on petroleum products, making fuel-supply continuity a direct mobility and logistics issue.

Household energy needs: LPG, PNG, and electricity access for households links energy security directly to welfare and public health outcomes.

Role of the Public Sector In Energy Security

ONGC (Oil and Natural Gas Corporation): the state-run upstream producer has maintained average annual crude production of around 19.6 MMT despite ageing fields, and Oil India Ltd increased production from 2.94 MMT to 3.44 MMT over the last five years.

India has contained the annual production decline rate from mature fields to around 2%, well below the global average decline rate of 6% for mature fields as benchmarked by the IEA.

Indian Oil Corporation, Bharat Petroleum Corporation, and Hindustan Petroleum Corporation: these public-sector Oil Marketing Companies (OMCs) run the bulk of India's downstream refining, distribution, and retail fuel network.

Strategic Petroleum Reserves (SPR): managed by Indian Strategic Petroleum Reserves Limited (ISPRL), with 5.33 Million Metric Tonnes (MMT) capacity across three underground rock-cavern facilities at Visakhapatnam (1.33 MMT), Mangalore (1.5 MMT), and Padur (2.5 MMT).

Government policy support: the Centre sets exploration licensing rounds, ethanol-blending targets, and strategic reserve expansion — the coordinating layer that makes both public and private investment viable.

Role of the Private Sector In Energy Security

Reliance Industries: operates the world's largest single-location refining complex at Jamnagar, and remains India's dominant private refining and petrochemical player.

Private refining capacity: private and joint-venture refineries supplement public-sector refining capacity, helping India remain the world's fourth-largest refiner.

Exploration investment: private and foreign capital/technology optimize marginal or deepwater fields beyond public-sector budgetary capacities.

Renewable investment: private conglomerates drive major solar and green hydrogen projects, supporting public clean energy goals.

Tech & innovation: private firms adopt advanced exploration and drilling technologies faster due to fewer procurement constraints.

Global energy partnerships: private firms independently secure overseas supply contracts and stakes, creating a second diversification channel beside state diplomacy.

Significance of Public-Private Model 

Large capital requirements: exploration, refining, and strategic storage all require capital at a scale that neither sector can efficiently mobilise alone.

Strategic control: public-sector ownership of core reserves and pipeline networks preserves national strategic control over critical infrastructure during emergencies.

Technological innovation: private capital and competition accelerate technology adoption that public-sector procurement cycles often slow down.

Risk sharing: exploration risk, price risk, and geopolitical supply risk get distributed across both public balance sheets and private capital, rather than concentrated entirely on the exchequer.

Supply diversification: private firms' independent international sourcing adds resilience alongside government-negotiated supply agreements.

Infrastructure development: joint public-private investment in pipelines, LNG terminals, and storage expands national capacity faster than either sector alone.

India's Energy Diversification Strategy

Diversification of oil suppliers: India has expanded its crude oil supplier base from 27 countries to 41, and its LNG supplier base from 6 countries to 15, directly reducing concentration risk in any single geopolitical region.

Expansion of LNG sources: broader LNG sourcing reduces reliance on any single gas-exporting region for India's growing gas-based industrial and power demand.

Renewable energy: continued large-scale solar and wind capacity addition reduces the pace at which oil and gas import dependence would otherwise grow.

Nuclear energy: expansion of nuclear capacity offers a low-carbon, domestically controllable baseload power source.

Biofuels: the Ethanol Blended Petrol (EBP) Programme advanced 20% ethanol-blending target from 2030 to Ethanol Supply Year 2025-26, directly cutting crude-linked petrol demand.

Green hydrogen: emerging as a long-term substitute for imported fossil feedstock in industrial and transport applications.

Way Forward

Deepen Domestic Exploration

Use OALP/HELP to attract private and foreign technology into deep-water and frontier basins; crude production fell from 34.2 MMT in 2018-19 to 28.4 MMT in 2024-25.

Build a Deeper Strategic Buffer

India's total reserve cover is around 74 days, but actual strategic cavern capacity is only 5.33 MMT; expand SPR Phase-II while moving toward the IEA benchmark of 90 days of net imports. 

Accelerate Renewable Substitution

India reached 54% non-fossil installed capacity by July 2026; scaling this transition reduces structural dependence on imported hydrocarbons. 

Scale Green Hydrogen

The National Green Hydrogen Mission targets 5 MMT/year production by 2030, supported by about 125 GW additional renewable capacity, directly targeting fossil-fuel import dependence in refining, fertilisers and heavy industry. 

Strengthen Energy Infrastructure

Expand pipelines, LNG terminals, strategic storage and cross-country transmission to create multiple supply pathways; this converts diversification from a sourcing strategy into physical resilience. 

Reduce Oil Demand, Not Just Import Risk

Scale EVs, public transport, fuel-efficiency standards, biofuels and energy-efficient industry; energy security ultimately requires reducing the volume exposed to volatile global markets, not merely finding more suppliers.

Institutionalise Energy-Risk Planning

Create an integrated national energy-security risk dashboard covering supplier concentration, shipping chokepoints, inventories, prices and strategic minerals; the 2026 Hormuz disruption demonstrates why corridor risk must be treated alongside supplier risk. 

Conclusion 

With crude import dependence at a record 88.7%, India needs public-sector strategic control and private-sector capital and technology working together to secure reliable, affordable, and diversified energy supply.

Source: INDIANEXPRESS