India's strategic approach to energy security, combining deft diplomacy, aggressive diversification, and robust digital infrastructure, shielded the country from severe fuel price shocks and supply disruptions during the recent West Asia crisis, according to former Ambassador to the UAE Sunjay Sudhir.
Fuel price hike limited to 7% while global prices surged 25-30%
Speaking to ANI, Sudhir highlighted that India managed to limit domestic fuel price increases to just 7%, while the rest of the world grappled with double-digit hikes averaging 25-30%. The Indian crude basket surged from $70 to $156 per barrel, yet the government held prices by reducing excise duties and absorbing huge under-recoveries by oil marketing companies. The state lost approximately Rs 24 per litre on petrol and Rs 30 per litre on diesel.
"That short-term pain was very important to keep the macroeconomics of the country stable and also to buffer the cost impact on the individual," Sudhir added.
Supply side measures: diplomacy and institutional coordination
India's energy imports rely heavily on the Strait of Hormuz for 90% of LPG, 60% of LNG, and 40% of crude. To mitigate risks, the government institutionalised an inter-ministerial group early in the crisis, involving all critical ministries. This coordination, combined with "very deft diplomacy" in maintaining active channels with Tehran and Gulf capitals, secured the safe passage of 12 vessels during the peak of the conflict, followed by 11 Very Large Crude Carriers after a Memorandum of Understanding was signed.
Diversification and strategic reserves
Looking ahead, Sudhir emphasised the need to transition from emergency crisis management to a sustainable long-term energy architecture. India is widening its supply base: in May, Russia was the highest supplier of crude, while the US was the largest supplier of LPG and LNG. However, strategic petroleum reserves currently stand at 5.33 million metric tons, covering only about 9.5 days of supply. "It's very less. We need to build on that," he stated.
Digital public infrastructure and city gas distribution
India's Digital Public Infrastructure (DPI) played a key role in preventing supply chain leakages, ensuring that the actual recipient receives the booked gas. Sudhir also highlighted the shift toward city gas distribution as a critical investment, noting that building this infrastructure takes time and cost, but it is cheaper and more reliable in the long run.
Geopolitical outlook: cautious optimism
On prospects for lasting peace in West Asia, Sudhir expressed cautious optimism but warned of lingering uncertainties. "Historically speaking, whenever there is a ceasefire, chances are that there will also be violations, but things should not flare up too much," he remarked. He identified Israel as a major X-factor, citing its domestic politics, Lebanon, and Hezbollah. "Israel is not a part of the MoU. What really happens on that front could also determine the success or the failure of this," he added.
