Page 46 - Policy Economic Report - August 2025

POLICY AND ECONOMIC REPORT
OIL & GAS MARKET

On the issue of Flex-Fuel Vehicles (FFVs), Shri Puri said that the Indian automobile industry has already
demonstrated its capability. Indian OEMs have begun rolling out prototypes for E85-compatible vehicles.
Continuous consultations have been held with the Society of Indian Automobile Manufacturers (SIAM)
and other major auto manufacturers, and the direction is clear—progressively moving towards higher
ethanol blends. The Ethanol Blending Roadmap (2020–25) has laid a strong foundation, and the successful
rollout of E20—five years ahead of target—demonstrates both industry readiness and consumer
acceptance. The country will now gradually scale towards E25, E27, and E30 in a phased, calibrated
manner with the support of BIS standards and fiscal incentives.

The Minister stressed that ethanol blending is not just about mixing fuel—it is about
empowering Annadatas by turning them into Urjadatas, reducing crude imports, saving foreign
exchange, creating green jobs, and honouring India’s climate commitments. Over the past 11 years,
ethanol procurement has enabled ?1.21 lakh crore income to farmers, reduced crude imports by 238.68
lakh metric tons, and saved ?1.40 lakh crore in foreign exchange.

Speaking about India’s efforts in Sustainable Aviation Fuel (SAF), Shri Puri said the Ministry is working
closely with oil marketing companies, airlines, and global technology partners to develop and scale up
SAF. Like ethanol, India will adopt a phased approach to SAF adoption. A blending mandate has already
been initiated, with a target of 1% blending for international flights by 2027, increasing to 2% by 2028,
and scaling further as supply stabilizes. He also cited the example of the Indian Oil Corporation Ltd.
Refinery in Panipat, which is using used cooking oil to produce SAF—showcasing India’s innovative and
sustainable pathway forward.

Andaman Oil Exploration

Government is taking sustained measures towards exploring and identifying crude oil and hydrocarbon
reserves in the Andaman-Nicobar basin so that they can contribute to the country’s long term energy
security and reduce import dependence. Following the introduction of the Hydrocarbon Exploration and
Licensing Policy (HELP), the Government has allocated four blocks for oil and gas exploration in the
Andaman-Nicobar Basin, covering approximately 23,261 square kilometers (SKM). Exploratory efforts
have resulted in the acquisition of 8,501-line kilometers of 2-Dimentional (2D) seismic data and 3,270 SKM
of 3D seismic data in these blocks and three wells have been drilled in these blocks so far. Furthermore,
under Open Acreage Licensing Policy (OALP) - X, four blocks with a total area of 47,058 sq. km have been
offered in the Andaman Basin.

India’s Hydrocarbon Resource Assessment Study (HRAS) estimates hydrocarbon resources of 371 million
Metric Tons of Oil Equivalent (MMTOE) in the AN Basin. Subsequent to HRAS 2017, a 2D broadband
seismic survey has been completed in 2024 covering approximately 80,000 line kilometers of India’s
Exclusive Economic Zone (including in Andaman offshore). This has helped acquiring the essential sub-
surface data required for identifying prospective hydrocarbon reserves. Government through Oil India
Limited (OIL) has also acquired a total of 22,555 Line Kilometer (LKM) of 2D seismic data in Deep Andaman
Offshore Survey during 2021-22.

August 2025 Page | 45