The ministry of petroleum and natural gas (MoPNG) consistently increased its investments in refinery and marketing (R&M) and petrochemicals over the past six fiscal years, starting from FY20. Funding for exploration and production (E&P) has seen a decline.
In FY25, the ministry allocated a total of ₹1,19,402.52 crore for investments in public enterprises. The allocation includes ₹57,451.04 crore for R&M, ₹50,382.49 crore for E&P, ₹10,850.94 crore for petrochemicals, and ₹90 crore for engineering.
The allocations for E&P and R&M in FY24 fell to 34.15% and 38.90% respectively, marking the lowest levels since FY20. The decline follows a capital infusion of ₹30,000 crore in FY24, which was 21.91% of the total public enterprise investment.
Girishkumar Kadam, Senior VP and Group Head (Corporate Ratings) at ICRA, noted that the capital support of ₹30,000 crore for energy transition projects provided to oil marketing companies in FY24 was reduced to ₹15,000 crore and shifted to FY25 in the interim Budget.
Despite the reduction in E&P spending over the past six years, the MoPNG has intensified its efforts to boost domestic oil and gas production.
Ashwin Jacob, Partner and Energy, Resources and Industrial industry leader at Deloitte India, affirmed this, stating that the government has maintained its commitment to enhancing domestic hydrocarbon production.
As reported by thehindubusinessline.com, this includes initiatives such as forming a joint working group with representatives from private E&P operators, national oil companies, MoPNG, and the directorate general of hydrocarbons.
