A CEEW study warns India’s energy security risks now extend beyond fossil fuel imports to inflation and competitiveness. Vulnerabilities include concentrated suppliers, exposed shipping routes, limited reserves, and global price volatility.
India’s energy security challenge has evolved beyond dependence on imported fossil fuels and now poses wider risks to inflation, industrial competitiveness, public finances and strategic autonomy, according to a new study released by the Council on Energy, Environment and Water (CEEW).
The study, ‘How Secure is India’s Energy Future? Assessing Accessibility, Reliability, and Affordability’, said India’s fossil fuel system remains vulnerable due to concentrated suppliers, exposed shipping routes, limited reserves and storage capacity, refinery constraints and exposure to global price volatility. “India’s energy security challenge is no longer just about how much coal, oil, and gas the country imports. The deeper risk is that India’s fossil fuel system is exposed across the board – through concentrated suppliers, vulnerable shipping routes, limited reserves and storage, refinery constraints, and direct exposure to global price volatility,” the study said.
According to the report, India imported 88 per cent of its crude oil, nearly 48 per cent of its natural gas and about 26 per cent of its coal in 2024. Fossil fuels accounted for more than 28 per cent of India’s total import bill in 2024-25.
Highlighting the growing complexity of energy security risks, Hemant Mallya, Fellow at CEEW, said, “India has strengthened energy access, diversified supplies, and scaled clean energy. However, our study shows that energy security risks are becoming more complex.” He added, “Disruptions in crude oil, LNG, LPG, coal, or key shipping routes can quickly affect cooking costs, transport fuel prices, fertiliser subsidies, industrial competitiveness, and inflation.”
Analysis of Key Energy Imports
The study found that over 85 per cent of India’s crude oil imports come from just six countries, including Russia and West Asian nations, limiting flexibility during supply disruptions. It also noted that India’s strategic petroleum reserves cover only 9-10 days of net crude imports, with another 64 days available through refinery operational stocks.
Natural Gas and LPG Vulnerabilities
The report flagged natural gas as another area of concern, noting that India imports nearly half of its gas requirements as LNG but has no dedicated strategic gas storage. “The study estimates that if the share of imported gas in city gas distribution rises from 15 per cent to 50 per cent, CNG prices could increase by 15-17 per cent under high global price conditions,” it said.
The study also identified LPG as a major household energy security vulnerability. It noted that nearly 95 per cent of India’s LPG supply depends on imports, either directly or through domestic production linked to imported crude oil.
Dependence on Imported Coking Coal
On coal, the report said India’s energy security risks are increasingly shaped by dependence on imported coking coal, particularly from Australia, which remains critical for steel production.
The Way Forward: A Clean Energy Transition
The CEEW study argued that accelerating clean energy adoption could provide a long-term hedge against fossil fuel-related vulnerabilities. “India’s next phase of energy security must move beyond securing fossil fuels to a clear transition plan: optimising gas system utilisation, avoiding further refinery expansion, accelerating viable EV adoption, electrifying industry, reconfiguring refineries for lower gasoline demand, and building resilient green technology supply chains,” Mallya said.
The study said India’s energy security strategy should gradually shift from managing fossil fuel supply risks to reducing fossil fuel exposure through clean energy, electrification, strategic reserves and resilient technology supply chains. (ANI)
(Except for the headline, this story has not been edited by Asianet Newsable English staff and is published from a syndicated feed.)