New Delhi, June 30: Former Chairman of Indian Oil Corporation Limited (IOCL), B. Ashok, stated on Tuesday that despite recent geopolitical tensions in the Strait of Hormuz, India has successfully avoided a major fuel and energy crisis.
In an exclusive interview with a news agency, Ashok highlighted that strategic preparations made over the past decade, diversification of energy sources, expansion of refining capacity, and prompt diplomatic initiatives by the government were key factors behind this success. He noted that these efforts allowed India to limit fuel price increases to just 7% and maintain a steady supply of domestic LPG.
Ashok explained that prior to the crisis, India imported about 45% of its crude oil through the Strait of Hormuz, while the remaining 55% came from other regions. However, within weeks, India increased its imports from non-Hormuz sources to 70%.
He emphasized that this shift was not sudden but rather the result of years of strategic planning. A decade ago, India imported crude oil from only 27 countries, but by 2026, this number had risen to 41. This required not only trade agreements but also compliance with various legal frameworks, port facilities, and quality standards.
In the interview, Ashok noted that India’s modern refineries are now capable of processing various types of crude oil. Previously, refineries were designed for specific types of crude, but technological advancements have enabled them to refine different grades of crude oil efficiently.
He also mentioned that logistics posed a significant challenge. Oil from the Middle East reaches India in five days, while oil from countries like the United States can take up to 30 days. Nevertheless, India successfully navigated these challenges due to a robust supply chain and improved port infrastructure.
Ashok pointed out that 85 to 90% of fuel supply in India is managed by public sector oil companies. Therefore, the government’s primary objective was to provide relief to the common consumer.
He explained that the government cut excise duty on petrol and diesel by ₹10 per liter, significantly mitigating the impact of rising international prices. Additionally, oil companies were instructed to absorb extra costs and maintain retail prices. To facilitate this, companies raised additional capital for purchasing expensive crude oil.
To prevent private refiners from exploiting high international prices for large-scale exports, the government imposed export duties, ensuring sufficient fuel availability in the domestic market.
Regarding LPG supply, Ashok stated that this challenge was even greater than that of crude oil. India imported about 65% of its LPG needs, with nearly 90% of the supply coming through the Strait of Hormuz.
He praised the government’s decision to implement the LPG Control Order during the crisis, directing domestic refiners to maximize LPG production. Hydrocarbons used for petrochemicals were redirected towards LPG production, resulting in nearly a 50% increase in domestic output.
Ashok noted that the government prioritized domestic consumers, as approximately 90% of LPG consumption occurs in households. Initially, limited supplies were provided to commercial and industrial consumers, but later, supplies were balanced to meet the needs of hotels, restaurants, and industries.
He remarked that India’s balanced foreign policy and strong relationships with all relevant countries played a crucial role during the crisis. The government engaged in rapid high-level diplomatic discussions with various nations, ensuring that the supply of LPG and other essential energy products remained uninterrupted even amidst conflict.
Ashok revealed that nearly 99% of households in India now have access to LPG. The government’s priority was to ensure that no household faced a shortage of cooking gas.
He further explained that with limited commercial LPG supply, the risk of misuse of subsidized domestic cylinders increased. To combat this, a digital authentication system was implemented, effectively curbing illegal sales of domestic cylinders and ensuring no region faced an LPG shortage.
Ashok concluded by stating that the government is also promoting piped natural gas (PNG) to reduce dependence on imported LPG. India meets about 50% of its natural gas needs through domestic production. In cities where PNG networks are available, its use is being encouraged, which he believes will strengthen energy security in the future.
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