Year End Review-2025: Ministry of Petroleum & Natural Gas | 31 Dec 2025

Source: PIB

Why in News?

In 2025, the Ministry of Petroleum & Natural Gas implemented a multi-pronged strategy to secure affordable, sustainable energy by expanding infrastructure, promoting cleaner fuels, and strengthening strategic reserves for energy security.

• Energy Security refers to the uninterrupted availability of energy sources at an affordable price for a nation, ensuring its economic stability, national security, and sustainable development.

What are the Key Achievements of the Ministry of Petroleum & Natural Gas in the Year 2025?

• Clean Cooking Access: Pradhan Mantri Ujjwala Yojana (PMUY) reached ~10.35 crore beneficiaries; 25 lakh new connections approved for FY 2025‑26 while simplified ‘Deprivation Declaration’ eased enrolment.
  • Rs 300/cylinder subsidy for PMUY beneficiaries boosted average refill consumption to ~4.85 per annum in FY 2025‑26, indicating sustained LPG adoption.
• Marketing Infrastructure Expansion: >90,000 retail outlets digitised; >8,400 CNG stations & ~1.57 crore PNG connections established; 25,429 km gas pipeline operational (another 10,459 km under execution).
• Clean Mobility & Fuels: >27,400 electric vehicles (EVs) charging stations set up; 4,000 Energy Stations planned as multi‑fuel hubs (1,064 already operational).
• Gas Grid & Tariff Reform: Unified Pipeline Tariff regime (One Nation, One Grid, One Tariff) covers ~90% of pipelines, reducing regional cost disparities.
• Biofuels & Sustainable Aviation Fuel (SAF): Ethanol blending reached 19.24% in Ethanol Supply Year (ESY) 2024‑25.
  • Compressed Bio‑Gas (CBG) blending mandated from FY 2025‑26; Sustainable Aviation Fuel (SAF) roadmap set with 1‑5% blending targets from 2027.
• Upstream Reforms: Oilfields (Regulation & Development) Amendment Act, 2025 and Petroleum & Natural Gas Rules, 2025 enacted. Under the Hydrocarbon Exploration Licensing Policy (HELP), 2016, blocks covering over 3.78 lakh sq km were awarded, attracting committed investments of about USD 4.36 billion.
• Strategic Reserves: Phase‑II of Strategic Petroleum Reserves (SPR) facilities advanced, bolstering energy security against supply shocks.
  • India’s SPR facilities are located at Visakhapatnam (Andhra Pradesh), Mangaluru (Karnataka), and Padur (Karnataka). Phase II includes a new facility at Chandikhol (Odisha) and an expansion at Padur.

What are the Principal Challenges in Achieving Energy Security for India?

• High and Rising Import Dependence: India imports around 85% of its crude oil and 50% of its natural gas, with domestic crude production falling to 28.7 MT in FY25, (from 29.4 MT in FY24) creating a critical vulnerability to global price shocks. 
  • This risk was exemplified when the 2022 Ukraine crisis spiked Brent crude to USD 130/barrel, severely worsening India's trade deficit and inflation.
• Geopolitical Vulnerability: India's purchase of Russian oil led to severe economic consequences, including EU sanctions on Nayara Energy, US sanctions on Russian firms, and a 25% tariff and surcharge imposed by the US. 
  • The majority of India’s crude imports originate in the volatile Middle East, transiting through chokepoints like the Strait of Hormuz and facing disruptions such as the suspended Chabahar port project.
• Critical Minerals Dependency: India is 100% import-dependent for 10 critical minerals including lithium, cobalt, and  nickel necessary for energy transition. This creates severe vulnerabilities for its clean energy, EVs, defense, and semiconductor sectors, as China controls over 90% of rare earth processing, 95% of graphite processing, and 79% of refined cobalt production.
• Renewable Energy Infrastructure Bottlenecks: India's non-fossil fuel capacity reached Around 217 GW by January 2025, but faces critical constraints from transmission delays, corridor congestion, and subdued demand. 
  • Over 60% of large-scale solar and wind projects are concentrated in just 3 states—Gujarat, Rajasthan, and Tamil Nadu, increasing exposure to extreme weather and geopolitical tensions like war or hybrid threats.
• Strategic Petroleum Reserves Inadequacy: India's combined oil storage and Strategic Petroleum Reserves (SPR) can sustain about 77 days of requirement, which is 13 days short of the International Energy Agency (IEA)'s compulsory 90-day mandate. Its quantified storage capacity is a low 39 million barrels, far below China's 550 million and Japan's 528 million barrels.
• Global Competition for Resources: China’s state-backed contracts in Africa and Latin America and the EU’s hydrogen imports strategy intensify global competition for critical minerals and future fuels. India’s limited strategic acquisitions overseas, especially compared to China’s Sinopec and CNPC, weaken its leverage in these energy markets.

What Steps are Needed to Strengthen Energy Security for India?

• Boost Domestic Production: Fully implement the Oilfields (Regulation & Development) Amendment Act, 2025 to streamline clearances and expand Mission Anveshan for exploration in frontier basins like Krishna-Godavari and the Andaman islands. Additionally, deploy Enhanced Oil Recovery (EOR) and Artificial Intelligence in mature fields such as Mumbai High to improve recovery rates.
• Diversification of Energy Imports: To reduce Middle East reliance, India should lock long-term contracts with new suppliers like Guyana, Brazil, and Kazakhstan, and revive Iranian imports via a rupee-rial mechanism if sanctions ease. 
  • It must also utilize pipelines bypassing the Strait of Hormuz, including the UAE's Habshan-Fujairah pipeline and Saudi Aramco's East-West pipeline, to reduce supply vulnerabilities during regional conflicts.
• Accelerate Clean Energy Transition with Storage: Integrate a 4-hour battery storage mandate into new solar/wind bids and scale up the National Green Hydrogen Mission while developing hydrogen-ready pipelines. 
  • Concurrently, increase ethanol blending to 30% by 2030 using 2G/3G feedstocks and enforce Compressed Biogas blending mandates in city gas distribution networks.
• Building Critical Mineral Self-reliance: India must accelerate the National Critical Minerals Mission (NCMM), build domestic refining capacity via PPPs, and forge strategic partnerships with Australia and Argentina to secure supply chains. It should also establish a national stockpile and promote a circular economy through advanced recycling for long-term resource security.
• Geostrategic Energy Diplomacy: Champion the International Solar Alliance (ISA) and One Sun One World One Grid (OSOWOG) initiative for cross-border renewable trade. Simultaneously, deploy Small Modular Reactors with partners like the USA, France, and Russia to reduce fossil fuel reliance and build long-term resilience.

Conclusion

India’s energy security strategy in 2025 reflects a calibrated balance between affordability, diversification, sustainability, and strategic autonomy. While reforms, biofuels, gas infrastructure, and cleaner mobility have strengthened resilience, persistent import dependence, geopolitical risks, critical mineral vulnerabilities, and storage gaps necessitate deeper structural reforms and proactive energy diplomacy.