India needs to expand biofuel production and consumption to boost its energy security as crude oil prices soar amid the Middle East crisis, according to Tarun Kapoor, an adviser in India’s Prime Minister’s Office.
“The future of biofuels is about maximizing value from every available resource,” Kapoor said at the India Sugar and Bio-Energy Conference.
“From ethanol and compressed biogas to new applications in transport, industry and energy, we must expand the market and fully utilize the capacity we have created,” the PM office’s adviser said.
India, the world’s third-largest crude oil importer, which depended on the Middle East for nearly half of its crude oil imports before the war, has been paying a high price for alternative crude supplies since the Iran war began.
India launched in June a new fuel blend with an 85% ethanol component as part of the fuel flex mobility program to reduce dependence on imported oil.
“Flex Fuel Vehicles offer India a practical solution to reduce crude oil imports, strengthen the rural economy through ethanol demand, and advance low-carbon mobility,” Minister of Petroleum and Natural Gas, Hardeep Singh Puri, said at the time.
India’s average crude import price soared to above $100 per barrel last week, days before the international Brent crude oil benchmark hit $100 a barrel on Wednesday, for the first time since July.
The Indian basket of crude oil is the average of a derived basket comprising a sweet-grade benchmark, Dated Brent, and the sour-grade benchmark of the Oman and Dubai average imported by Indian refineries during each month.
India’s crude oil import bill has soared in recent months, due to the reduced oil flows from the Middle East and the high risks to shipping in the Strait of Hormuz.
India paid 60% more for crude oil imports in the April-June quarter compared to the same period last year, as the surge in oil prices offset slightly lower import volumes. The rise continued into the beginning of the third quarter, with the July import bill 41% higher than a year earlier.
By Tsvetana Paraskova for Oilprice.com
