Page 41 - Policy Economic Report - December 2024

POLICY AND ECONOMIC REPORT
OIL & GAS MARKET

In order to promote blending of ethanol in petrol, the Government has taken several measures
which includes expansion of feedstock for production of ethanol, administered price mechanism
for procurement of cane-based ethanol under the EBP Programme, Ethanol Interest Subvention
Schemes (EISS) for ethanol production from molasses as well as grains and Long-Term Offtake
Agreements (LTOAs) by OMCs with Dedicated Ethanol Plants (DEPs) etc. During the last three
years, as on 30.09.2024, EBP programme helped expeditious payment of approx. Rs 57,552 Cr to
the farmers, approximate savings of more than Rs. 75,000 Cr of foreign exchange, crude oil
substitution of nearly 110 lakh metric tonnes and net CO2 reduction of about 332 lakh metric
tonnes.

Importance of Oil Exploration and Production

As per the report of Energy Institute Statistical Review of World Energy, 2024, India is the world
third-largest energy consumer. Further, India’s energy consumption is increasing continuously,
due to sustained economic growth over the last few years, through industrialisation,
urbanisation, transportation needs, infrastructure development, rising income, improved
standard of living, increased access to modern energy coupled with increase in private
consumption and gross fixed capital formation, etc. resulting in increasing import of Crude Oil.
Currently, about ~13% of oil and ~53% of gas are domestically produced by E&P companies.
Exploration and Production (E&P) contributes to reducing the country’s dependence on imported
oil and gas through various mechanisms. Production of crude oil has been 29.36 MMT during
2023-24 and 14.4 MMT (provisionally) during the current year 2024-25. As per International
Energy Agency, projected demand of oil and petrol in India, by 2030, would be 6.6 mb/d (million
barrel per day) and 1.0 mb/d respectively.

Government has been taking various steps to boost domestic oil and gas production and
accelerate the pace of exploration activities which, inter-alia, include:

i. Policy under PSC regime for early monetization of hydrocarbon discoveries, 2014.

ii. Discovered Small Field Policy, 2015.

iii. Hydrocarbon Exploration and Licensing Policy (HELP), 2016.

iv. Policy for Extension of PSCs, 2016 and 2017.

v. Policy for early monetization of Coal Bed Methane, 2017.

vi. Setting up of National Data Repository, 2017.

vii. Appraisal of Un-appraised areas in Sedimentary Basins under National Seismic
Programme, 2017.

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