India is actively reducing its dependence on imported crude oil through a multi-pronged energy strategy encompassing ethanol blending, solar, wind, and hydrogen, Krishnakumar Gopalan, former Chairman and Managing Director of Bharat Petroleum Corporation Limited (BPCL), said on Monday, 25 May. Gopalan noted that the government had recognised the urgency of an energy transition early and has since worked closely with oil marketing companies to reduce vulnerabilities stemming from heavy crude import reliance.

Scale of India's Crude Import Exposure

India currently imports approximately 85 per cent of its crude oil requirement, leaving the economy significantly exposed to global supply disruptions and price volatility. This structural dependency has long been a pressure point for the country's current account and inflation management, particularly during periods of geopolitical turbulence.

Gopalan underscored that the sheer scale of this exposure has made diversifying the energy mix not just a policy preference but an economic necessity. This comes amid renewed global uncertainty over oil supply chains, trade negotiations, and OPEC output decisions.

Ethanol Blending and Renewable Expansion

As a first line of response, India has introduced 20 per cent ethanol blending in petrol, a programme that is being progressively accelerated. 'To address this challenge, India has introduced 20 per cent ethanol blending in petrol, which is gradually being accelerated further to cut dependence on crude imports,' Gopalan said.

Beyond ethanol, the country is scaling up renewable energy assets. 'That is one step where we are trying to reduce our dependency. The second step is we have made our efforts in increasing renewable assets, be it solar, wind, hydrogen. We are even looking at hydrogen retail outlets,' he said. The mention of hydrogen retail outlets signals a longer-term ambition to commercialise green hydrogen as a transport fuel — a segment still in early stages globally.

Oil Companies Absorbing Under-Recovery Burden

On the question of domestic fuel pricing, Gopalan said oil marketing companies have shouldered a significant share of the cost burden rather than passing it fully to consumers. According to him, the current under-recovery on petrol is approximately ₹13 to ₹14 per litre, while diesel under-recovery stands close to ₹38 per litre.

'The loss in petrol is about 13 to 14 rupees and diesel is about 38 rupees, so whatever increase has happened is only partial,' he stated. Despite these pressures, he credited oil marketing companies with maintaining supply continuity. 'They have been managing supplies very well. There are hardly any cases of dry outs except where there are localised crises,' he added.

Crude Price Outlook and Relief Ahead

Gopalan expressed cautious optimism about the near-term crude price trajectory. 'The good fact is crude has started coming down, there are positive indications about negotiations working and if that does happen, that will be a great relief, there won't be much increases required that will offset and the crude economy also will benefit,' he said.

A sustained decline in global crude prices would ease the under-recovery burden on oil marketing companies and potentially reduce the pressure on retail fuel prices. Notably, this is the broader context in which India's renewable push gains added urgency — insulating the domestic economy from the next crude price cycle before it arrives.