Over the weekend, India’s Prime Minister Narendra Modi announced new targets for refining and gas.
Modi increased the target of the natural gas’ share in India’s energy mix to roughly 25% by 2030. It was quadruple the current level of about 6%, and almost double the previous target of 15%.
The country’s refining capacity is targeted to double to around 10 million bpd by 2025, while just in October Modi raised the goal to grow India’s refining capacity by 60% to 8 million bpd by 2025. However, separately, Oil Minister Dharmendra Pradhan last month set a target for the refining capacity increase to 7 million bpd by 2030.
Other than those, Modi also announced a new decreasing target for India’s carbon footprint by 30-35% without a specific timeline.
Some analysts, however, believe that both the gas and refining targets are unachievable.
India is estimated to not even hit its previous target to grow its gas share to 15% by the end of this decade. Moreover, as demand for gas is rising at a slower rate, the current growth rates are only about 53% of the levels required by India to meet a 15% gas use target.
By 2030, India’s gas demand is estimated to only see 4-5% growth rates at around 326 million m3/d, way lower compared to the 611 million m3/d required to meet the 15% goal.
The refining capacity target is seen to be unattainable, mainly as state-controlled refiners led by the Indian Oil Co. (IOC) have started reviewing greenfield projects. Other than that, many of the commissions of expansion projects have been delayed due to the coronavirus pandemic.
At the moment, only two greenfield projects are at the launch stage in the whole country, with a combined capacity of 400,000 bpd and expected to be ready in 2025. Indian refiners are now focusing on upgrading plants and adding petrochemical units to boost sagging fuel margins instead.
On a related note, in the previous term of the PM, the ruling BJP government aimed to slash crude imports by 10% by 2022. However, in the last five years, the country’s reliance on imported crude has risen by 3% instead, to 85%.
