More Stories

Informist, Friday, May 30, 2025

NEW DELHI – The government has every intention of compensating state-run oil-marketing companies for under-recoveries in the financial year 2024-25 (Apr-Mar) to the tune of INR 400 billion, Minister of Petroleum and Natural Gas Hardeep Singh Puri said Friday. The government had compensated the companies for their losses in the past and "has every intention" of compensating them for under-recoveries in FY25 as well, he said on the sidelines of the Confederation of Indian Industry's Annual Business Summit.

The government will compensate the companies from the collection made from the recent increase of INR 2 per litre in excise duty on petrol and diesel, Petroleum and Natural Gas Secretary Pankaj Jain had said last month. The government expects to collect around INR 320 billion from the duty increase, Jain had told Informist. The collections will be routed through the Consolidated Fund of India and the finance ministry will oversee the transfers to the oil-marketing companies, Jain had said.

While this is not direct compensation from the government for the losses of oil-marketing companies, the last such compensation was granted by the Union Cabinet in October 2022, when the Centre announced a payment of INR 220 billion for the state-run oil companies' cumulative loss of INR 280 billion.

Referring to the growing focus on non-fossil fuels and sustainability goals, Puri said the petroleum ministry could well be renamed the "Ministry of Energy Transition". He said the ministry is promoting a clean energy ecosystem with green hydrogen, biofuels, and sustainable aviation fuels.

Puri said the government's biofuel policy has already delivered strong results and India is set to hit the 20% ethanol blending target ahead of the scheduled deadline of the ethanol year 2025-26 (Nov-Oct). In the future, sustainable aviation fuel would also play a critical role in India's long-term decarbonisation strategy, he added.

India has set a target of 1% sustainable aviation fuel blending with jet fuel by 2025, 2% by 2026, and 5% by 2030 to curb aviation emissions.

The minister called green hydrogen "fuel of the future" with enormous potential to reshape India's energy mix. The only thing that comes out of a bus powered by green hydrogen is water vapour, he said.

To ensure energy security, India is now sourcing more crude oil from the western hemisphere, with increased volumes coming from countries like Brazil, Guyana, and Suriname, he said. "There is no shortage of oil... more and more crude is becoming available," he said. India has diversified its import sources significantly, moving from reliance on 27 countries to about 40 now as a cushion against supply shocks and geopolitical risks.  End

Reported by Afra Abubacker

Edited by Rajeev Pai

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.

Informist Media Tel +91 (11) 4220-1000

Send comments to feedback@informistmedia.com

© Informist Media Pvt. Ltd. 2025. All rights reserved.