India will account for more than 40% of the global increase in crude oil demand and about 8% of the growth in natural gas demand between 2024 and 2035, according to estimates cited by the government in Parliament on Wednesday.
The statement was presented in response to a starred question in the Lok Sabha on the expected rise in India’s crude oil and natural gas demand and the preparedness of the government and the energy sector to meet this growth.
Domestic exploration and policy reforms
According to the report, to boost domestic production of both conventional and unconventional hydrocarbons, the government has rolled out multiple policies and regulatory reforms over the past decade. These include the Hydrocarbon Exploration and Licensing Policy (HELP), the Discovered Small Field Policy, early monetisation policies for coal bed methane (CBM), and the creation of a National Data Repository and National Seismic Programme.
In 2025, amendments to the Oilfields (Regulation and Development) Act expanded the definition of mineral oils to include unconventional hydrocarbons such as shale oil and gas, tight gas, tight oil and gas hydrates, enabling their production under a single lease.
Fiscal incentives have also been introduced for enhanced oil and gas recovery methods to attract further investment.
State-run explorers have stepped up data generation for shale resources, with ONGC drilling 30 wells and Oil India drilling four wells to assess shale gas potential in identified blocks.
Synthetic gas and coal gasification plans
The government stated that it is also promoting non-traditional sources of gas, such as synthetic natural gas through coal gasification.
Bharat Petroleum Corporation and GAIL have tied up with Coal India to set up coal gasification plants at Chandrapur in Maharashtra and Sonepur Bazari in West Bengal.
An incentive outlay of Rs 8,500 crore has been approved for coal and lignite gasification projects. In addition, a 50% rebate in revenue share has been introduced in commercial coal block auctions, subject to at least 10% of total production being used for gasification, as per the report.
Pipelines, city gas and strategic reserves
India currently operates over 10,400 km of crude oil pipelines, 24,000 km of petroleum product pipelines and 25,429 km of natural gas pipelines, including sub-transmission and connectivity lines, the report added. Public sector undertakings are continuing to expand the transportation network to support future demand.
The Petroleum and Natural Gas Regulatory Board (PNGRB) has authorised a nationwide natural gas pipeline network to build a National Gas Grid. It has also approved City Gas Distribution (CGD) networks in 307 geographical areas, covering the entire mainland.
On the storage front, India has built strategic petroleum reserves with a total capacity of 5.33 million metric tonnes (MMT) at Vishakhapatnam, Mangaluru and Padur. Two additional commercial-cum-strategic reserves with 6.5 MMT capacity have been approved at Chandikhol in Odisha and Padur in Karnataka. Refinery locations across the country together add another 8 MMT of crude tankage capacity.
Biofuels and green hydrogen in focus
To integrate green energy into the future energy mix, the government is expanding its biofuels and green hydrogen programmes.
Ethanol blending in petrol by public sector oil marketing companies has risen from 1.5% in 2014-15 to nearly 19.97% in 2024-25 (up to October 2025). This has resulted in crude oil substitution of about 260 lakh metric tonnes and foreign exchange savings of over Rs 1.55 trillion.
The National Green Hydrogen Mission aims to achieve production of 5 million metric tonnes per annum of green hydrogen by 2030.
Long-term energy transition strategy
While hydrocarbons will continue to anchor India’s energy system in the medium term, the government said it is pursuing a parallel strategy of scaling up domestic production, strengthening transport and storage infrastructure, and integrating green fuels to prepare for the projected surge in demand by 2035.