India's Energy Reliance: A Need for Strategic Reassessment

New Delhi, April 10 As the world scrambles to recover from the biggest energy shock in decades triggered by the West Asia conflict, India should be cautious about relying on traditional supply assumptions, particularly its proximity to the Middle East for sourcing oil and gas, ONGC Chairman and CEO Arun Kumar Singh said on Friday.

India, which relied on the Middle East to meet nearly half of its crude oil imports, 30 per cent of its gas, and 85-90 per cent of LPG, must invest in building strategic storage as an insurance against price and supply disruptions, he said.

The six-week closure of the only shipping lane used by the Gulf countries to export crude oil (the raw material for making petrol and diesel), natural gas (used to make fertilizer, generate electricity, and power automobiles), and LPG (cooking gas) created a major disruption.

This led to an energy crisis in several importing countries, including India, which had to prioritize the supply of gas.

"Assuming that the Middle East is closest to us and therefore all their resources (can be accessed easily), we should take this with a grain of salt," Singh said at the Energy Security conclave organized by the oil regulator PNGRB.

He warned that a shifting global order and rising geopolitical tensions are undermining long-held assumptions about energy security.

"A paradigm shift has happened," he said. "If the world becomes more and more de-globalized, we will face more and more problems."

Singh said India's high energy import dependence makes it especially vulnerable in an increasingly fragmented world.

"For the next 30-40 years… if you have multiple (sources of energy), then you will have a constant 'war of supremacy'," he said.

He stressed that boosting domestic production is now critical.

"We have been focusing on this intensely, except for deep water," he said, adding that increasing output is an "existential necessity".

Calling for a strategic reset, Singh urged India to aggressively pursue domestic exploration and build resilience.

"We should chase wherever oil or gas is in our country at any cost, because in a crisis, nobody (will help)," he said.

He also emphasised the need to expand storage capacity.

"We must now address this storage… whatever it takes," Singh said.

Highlighting growing volatility in global markets, he said refining economics have become increasingly unpredictable.

"We should be prepared to see more and more of this," he said, citing unprecedented instances where product margins exceeded crude costs. "Nobody had ever imagined… at least I, in this industry for the last 40 years."

Singh also pointed to rising resource nationalism among producer nations.

"No country wants you to take away their oil. They want you to take away their money, not the oil," he said.

He called for diversification across fuels and supply chains.

"We must diversify energy types… we must diversify our energy storage," he said.

On liquefied petroleum gas (LPG), Singh said India has significantly boosted domestic supply.

"Earlier, it was 30 per cent, now it's 60 per cent," he said, adding that refiners reconfigured operations to support the shift, though "this has come at a cost."

He also suggested prioritizing piped natural gas for households.

"Instead of CNG… the directive should be towards piped natural gas (PNG)," he said. "At least kitchens will not stop."

Despite global disruptions, Singh said India had effectively managed the situation.

"You should be very proud of what the country has achieved," he said.