A new EY report warns that India’s petroleum sector faces rising vulnerability due to increasing crude oil import dependence. The consultancy says the share of imported crude rises steadily, moving from about 55% in FY1999 to slightly above 90% in FY26. EY links this trend to limited domestic crude output and notes that crude production has eased after peaking in FY12, while consumption of petroleum products continues to grow. The report also highlights a thin buffer: India’s strategic oil inventories are described as around 21 million barrels, which EY says covers roughly five days of consumption, compared with China’s significantly larger stockpile. EY presents these factors as external risk channels for the domestic economy, especially during global supply disruptions or geopolitical shocks.
The report recommends that India augment its strategic crude oil reserves and develop a reserve strategy that specifies target volumes and the rules for purchasing and releasing crude, factoring in carrying costs. EY also suggests maintaining and expanding refining capacity, while accelerating a transition toward alternative and lower-carbon energy sources, including nuclear energy, alongside efforts to improve resilience.
