Can India capitalize the current oil crisis?

The current oil crisis highlights India’s urgent need for energy security, as about 85% of petroleum consumption depends on imports. With rising crude prices, the import bill could double, putting pressure on the economy and weakening the rupee.

Following means can be targeted:

1. Shift freight from road to rail: A major portion of diesel (especially 50 Mt used by trucks) can be reduced by moving long-distance goods transport to railways. Improving railway efficiency, lowering freight tariffs, and expanding dedicated freight corridors (DFCs) can help achieve this.

1A. Railway reforms: Introduce Trucks-on-Train (ToT) systems, increase availability of flat wagons, and improve reliability and delivery timelines to compete with road transport.

1B. Reduce petroleum consumption: Target shifting 50% of freight to rail by 2030 and 90% by 2035, which could significantly cut diesel usage and overall fuel consumption.

2. Promote alternative fuels: Ethanol blending (20%) helps reduce petrol consumption, but better sources like agricultural waste should be used instead of corn. Government schemes should support ethanol plant setup as well as procurement.
3. Boost electric vehicles (EVs): India aims for large-scale EV adoption by 2030 across cars, buses, and two/three-wheelers, potentially reducing fuel demand significantly.
4. Improve bio fuel ecosystem: Develop systems for collecting agricultural waste and producing biofuels efficiently.

Conclusion:

A combination of railway reforms, EV adoption, ethanol use, and logistics improvements can reduce India’s dependence on oil imports. The current crisis should be used as an opportunity to strengthen long-term energy security and sustainable growth.

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