The Indian Express | High oil prices accelerate transition to green energy: Union Minister Hardeep Singh Puri

Feb 08,2023

High global crude oil prices could be detrimental to major oil producers in the long run as the transition to green energy tends to accelerate during bouts of price surge, Petroleum Minister Hardeep Singh Puri said Wednesday.

“If producers push it (oil price) in a certain direction, there will be consequences—intended and unintended. When prices were at their highest in 2022, the transition to green energy was the fastest,” the minister said in an interaction with journalists at the India Energy Week in Bengaluru.

India, the world’s third-largest consumer of crude oil, depends on imports to meet 85 per cent of its oil requirement. This means that high oil prices adversely affect India on multiple fronts, including inflation and current account deficit. India has, time and again, pitched for “responsible pricing” of oil to ensure viability for major consuming countries as well as producers.

Puri said he has been invited by the Organization of the Petroleum Exporting Countries (OPEC) to its next meeting. He is expected to engage with the group of major oil producers on key matters like supply and prices. Over the past few years, OPEC and its allies have been using output tweaks to support oil prices.

Puri has been emphasising that fossil fuels do have an important place in the global energy transition path, and has been advocating for a gradual transition to green energy instead of an abrupt and disruptive shift. On Tuesday, he had said affordable traditional energy sources are essential for meeting base load requirements, while new and innovative energy sources are critical for combating climate change.

“There is no conflict of interest (between energy transition and fossil fuels). The problem comes when you cut back (oil) output,” Puri said on Wednesday, adding that if oil producers cut output just to keep prices elevated, it results in price surges that hit the developing world the most.

To serve the twin objectives of climate action and reducing dependence on imported fossil fuels, India has planned an ambitious energy transition roadmap, which includes attaining net-zero emission status by 2070. Puri said that while India is committed to all its climate aims and is pushing a transition to clean energy, such a transition must not be at the cost of the poor, and must be “realistic and durable”.