On energy promises, discounted Russian barrels, the food vs. fuel trap, cars being killed by policy, and why the benefits of cheap oil never reach the pump—or the bus ticket.

My husband filled our car with petrol in Delhi last week. The price was ₹96.72 per litre—unchanged since March 2024. Meanwhile, crude oil prices have fallen 21% over the past year. The Indian basket of crude averaged $68 per barrel in April 2025, a 47-month low. Brent briefly dipped below $70. And still, nothing at the pump.

Where did the savings go?

The answer involves a broken promise, a collapsed domestic oil industry, Asia's richest man, and the largest war in Europe since 1945.

I should note upfront: I hold no brief for Ukraine in this conflict. The Russia-Ukraine war is, at its core, a white man's war—white-skinned, blue-eyed Europeans killing each other over territory, with the West suddenly discovering the horrors of displacement and civilian bombardment that it has watched with equanimity in Yemen, Syria, Gaza, and elsewhere for decades. The selective solidarity—refugees from Kyiv welcomed while those from Kabul drown in the Mediterranean, sanctions for Moscow while arms flow to Riyadh and Tel Aviv—exposes a racial hierarchy in the international humanitarian order that deserves its own accounting.

But the political economy of India's oil choices is worth examining on its own terms, without getting drawn into the moral posturing of either side.

The 67% That Became 89%

In March 2015, Prime Minister Narendra Modi inaugurated 'Urja Sangam 2015'—India's biggest global hydrocarbon meet. He was characteristically ambitious. India, he declared, would reduce its oil import dependence from 77% to 67% by 2022, when the country would celebrate 75 years of independence. By 2030, he promised, import dependence would be halved.

The mechanism was clear: boost domestic exploration and production, expand biofuels, and accelerate renewables. Oil Minister Dharmendra Pradhan assured parliament as late as November 2019 that India was "very much on track" to meet the target.

In March 2025, India's crude oil import dependency hit an all-time high of 89.1%, up from 88.6% a year earlier. The promised 67% became 89%. The gap isn't a rounding error—it represents the complete collapse of a policy agenda.

Domestic Production: The Quiet Collapse

What happened? Domestic production didn't stagnate; it cratered. In 2013-14, Indian companies produced 37.8 million tonnes of crude oil. By 2019-20, this had fallen to 32.2 million tonnes—a 15% decline. By FY25, production had slumped further to approximately 29-30 million tonnes. That's a 22% collapse in domestic output during the Modi years.

ONGC, which produces roughly 70% of India's crude, saw its exploration budget halved in real terms between 2019-20 and 2023-24—from approximately ₹18,000 crore to around ₹9,000 crore. The national oil company was starved of capital for new exploration even as ageing fields depleted. Oil India fared no better. Licensing regimes failed to attract private investment. No significant discoveries were made.

The 67% target was abandoned without acknowledgement; the goalposts simply moved to "energy independence by 2047." A promise deferred by 25 years is a promise broken.

From 2% to 36%: Russia as the Solution to Policy Failure

Into this vacuum came Vladimir Putin's war—and an opportunity.

Before February 2022, Russia supplied roughly 2% of India's crude imports. By FY24, that figure had risen to approximately 36%, making Russia India's largest single source of crude. In absolute terms, Indian imports of Russian crude went from $1.1 billion in FY22 to $50.2 billion in FY24—a 46-fold increase in two years.

The discount was real. Russian Urals crude traded at $10-15 below Brent for much of 2023-24—occasionally reaching $20 or more. Indian refiners, with their sophisticated cracking capacity, could process heavier Russian grades that European refineries couldn't handle. The arithmetic looked favourable.

But favourable for whom? When discounted crude became available in 2022, India wasn't merely pursuing clever arbitrage—it was facing a crisis of its own making: domestic production in freefall, consumption up 30% over a decade (from 185 MMT to 240+ MMT), and an import bill that had doubled in three years. The $13-25 billion in Russian crude "savings" represent not consumer benefit but the masking of a policy failure. Without Russian discounts, India's import bill would have been catastrophically higher.

₹3,400 Crore to ₹86,000 Crore: Follow the Money

The three oil marketing companies—Indian Oil, Bharat Petroleum, and Hindustan Petroleum—reported combined net profits exceeding ₹86,000 crore in FY24, up from ₹3,400 crore in FY22. That's a 25-fold increase in two years.

Reliance Industries, which operates the world's largest refining complex at Jamnagar, reportedly captured over $6 billion in windfall profits from processing discounted Russian crude. The private sector wasn't merely participating in strategic diversification; it was minting money.

The government collected its share too. Excise duties and cesses on petrol and diesel brought in approximately ₹4.7 lakh crore in FY24. When crude prices fell, excise duties rose to capture the difference. When crude prices rose, retail prices rose with them. The ratchet moved only one way.

And at the pump? Nothing. Petrol prices in Delhi have been frozen since March 2024, through a 27% decline in crude costs, through record refinery profits, and through billions in government windfall. The consumer subsidy that cheap Russian crude was supposed to deliver never arrived.

The Laundromat: India as Sanctions Bypass

India isn't just buying Russian crude; it's processing and reselling it.

In 2023, Indian refined petroleum exports exceeded $60 billion—much of it refined from Russian crude, much of it shipped to Europe and the United States, which officially sanctioned such purchases. The Centre for Research on Energy and Clean Air tracked approximately €724 million worth of Russian-origin refined products flowing from India to the US alone.

A shadow fleet of ageing tankers, many operating without proper insurance or with opaque ownership structures, carries Russian crude to Indian shores. Payment mechanisms have shifted to UAE dirhams and Indian rupees to evade dollar-denominated tracking. India has become, in effect, a sanctions laundromat—purchasing sanctioned crude at a discount, refining it, and selling the products at market rates to the very countries that imposed the sanctions.

The Centre for Research on Energy and Clean Air estimated that approximately $150-170 million flows daily from India to Russia through crude purchases. That's roughly $55-62 billion annually—material war financing by any measure.

The Ethanol Trap: Food, Fuel, and Killing Cars

The alternative strategy—biofuels—has created problems of its own.

India achieved E20—20% ethanol blending in petrol by October 2025, five years ahead of schedule. The government celebrates this as an environmental and energy security achievement. The reality is a cascading policy failure.

The food security crisis: Maize demand for ethanol surged from 0.8 million tonnes in 2022-23 to 12.7 million tonnes in 2024-25—a 16-fold increase. India—traditionally a maize exporter to South and Southeast Asia—became a net importer in 2024. Maize imports jumped 7,940% in a single year. The All-India Poultry Breeders Association reported domestic shortages of 5 million tonnes, driving up poultry and egg prices. 34% of India's maize production now gets diverted to ethanol.

Sugarcane-based ethanol is extraordinarily water-intensive—2,000-3,000 litres of water per litre of ethanol produced. The programme requires approximately 7.1 million hectares of cropped area—3% of India's gross cropped area—dedicated to fuel rather than food. We are trading food security for a programme that has reduced crude imports by just 0.8%.

The invisible price hike: Ethanol has 27% lower energy content than petrol. Vehicles calibrated for E10 see a 5-7% drop in fuel efficiency when running E20. My husband pays the same per litre but gets fewer kilometres per litre. That's a stealth price increase that never appears in inflation statistics.

Killing older cars: Here's where the policy turns cruel. Most vehicles manufactured before April 2023 were not designed for E20 fuel. Ethanol is corrosive—it degrades rubber gaskets, fuel lines, and hoses in older fuel systems. It's hygroscopic—it absorbs moisture, causing metal components to rust. Toyota and Hero MotoCorp have warned that using E20 in non-compliant vehicles could void warranties. Car owners across the country report mileage drops of 3-6%, cold-start problems, and engine knocking.

The government's response? The Ministry of Petroleum dismisses concerns as "largely unfounded". It suggests that older vehicles might need to replace "some rubber parts/gaskets" after 20,000-30,000 km—"inexpensive and easily done during regular servicing." Meanwhile, carmakers have absolved themselves of liability. Insurers have hedged. And E10 fuel has quietly disappeared from pumps across major cities—consumers have no choice but to use a fuel their vehicles weren't designed for.

The 15-Year Squeeze: When Your Car Becomes Illegal

Now consider this in conjunction with Delhi's vehicle scrappage policy.

From April 2025, petrol vehicles older than 15 years and diesel vehicles older than 10 years cannot be fuelled at any station in Delhi. Over 500 fuel stations now have ANPR cameras linked to the VAHAN database, automatically denying fuel to non-compliant vehicles. An estimated 5.5 million vehicles in Delhi exceed the age limit—66% of them two-wheelers owned by working-class families.

The logic is environmental: older vehicles pollute more. The implementation is brutal. A well-maintained car purchased for 15 years of use now has its registration rights effectively voided by retrospective application of NGT guidelines. The scrappage value offered—based on the weight of metal—is a fraction of what families paid. The "incentives" (25% road tax rebate, registration fee waiver for new vehicles) assume you can afford a new car in the first place.

The double squeeze works like this: your pre-2023 car is being damaged by E20 fuel you're forced to use. Your pre-2010 car (petrol) or pre-2015 car (diesel) will soon be denied fuel entirely. Either way, you're being pushed toward replacement—toward new debt, new EMIs, new vehicles. The scrapping policy intended to reduce pollution is, in practice, a forced transfer of wealth from existing car owners to automobile manufacturers and financing companies.

Auto expert Vinod Gupta told reporters: "A well-maintained old car may pollute less than a poorly serviced new one." The policy ignores this. Fitness-based rather than age-based standards would be more equitable—and indeed, the Ministry of Road Transport is now considering exactly this shift. But for Delhi's car owners, the damage is already done.

The Commuter Pays Twice: Public Transport's Failure

If private motoring offers no relief, what about public transport?

Bengaluru Metro became India's costliest metro system in February 2025, with a 50-105% fare hike that pushed the maximum ticket to ₹90 for its 76-kilometre network. Delhi Metro, with its sprawling 353-kilometre network, charges ₹60 for journeys beyond 32 km—and raised fares again in August 2025, the first increase in eight years, with more increases planned.

A Greenpeace India survey found that 72.9% of Bengaluru commuters now spend more on daily metro fares than on a single meal. Bengaluru's fares are 25-50% higher than Delhi, Mumbai, Nagpur, and Chennai, and another 5% annual increase is already scheduled for 2026.

Meanwhile, Delhi's bus fleet shrank from 8,240 buses in January 2024 to 5,835 by July 2025—a 29% reduction. The DTC continues to phase out old buses without adequate replacements. India has just 1.2 buses per 1,000 people compared to global benchmarks of 5-8. Only 63 of 458 cities with populations over one lakh have a formal bus service.

The policy failure in energy translates directly into mobility poverty. The cheap Russian crude was supposed to ease costs across the economy. Instead, the commuter pays at the petrol pump (frozen prices despite falling crude), at the metro turnstile (rising fares), on the bus (shrinking networks), and again when their old car is rendered worthless by scrappage policy or E20 damage.

The Moral Accounting

I have no interest in performing moral outrage on behalf of a Western order that cheerfully armed Saudi Arabia to bomb Yemen's children, that watched Syria's hospitals burn, that maintains a sanctions regime on Iran while funding and arming Israel's operations in Gaza. The selective humanitarianism of the "rules-based international order" deserves its own reckoning.

But within India, we might ask: if we're going to finance someone's war—$150-170 million daily, $55-62 billion annually—shouldn't we at least get something for it?

The discounted crude arrived. The refinery profits boomed. The government coffers are filled. And the family filling their car in Delhi—or taking the metro to work, or waiting for a bus that may not come, or watching their 12-year-old car slowly corrode from mandated ethanol—saw nothing.

The Question Nobody Asks

The question isn't whether India should buy cheap oil where it can find it. That's defensible realpolitik for a developing country of 1.4 billion people.

The question is who benefits from that cheapness—and whether the domestic political economy is designed to share those benefits or capture them. Right now, Mukesh Ambani's refinery margins benefit. Government treasuries benefit. OMC shareholders benefit. Russian war financing continues.

The consumer? They pay ₹96.72 at the pump for sanctions-evading crude. They pay in food prices as maize goes to ethanol. They pay in mileage as E20 delivers less energy per litre. They pay in transport costs as metro fares rise and bus fleets shrink. They pay when their car is scrapped or damaged by policy choices they had no say in.

The promise was 67% import dependence by 2022. The delivery was 89%—, and a system designed to ensure that when the breaks come, they go to those who need them least.

Further reading:

1. IEA, "India Oil Market Report" (2024)

2. Centre for Research on Energy and Clean Air, Russia Fossil Tracker

3. The Diplomat, "India's Russian Oil Dilemma" (August 2025)

4. National Bureau of Asian Research, "Oil for India" (2024)

5. Kharon, "How Russian Oil Is Flowing into India" (September 2025)

6. Down to Earth, "Lost in Maize" (June 2025)

7. The India Forum, "Challenges in Meeting Ethanol Fuel Blending Target" (2024)

8. Autocar India, "Will E20 fuel damage your car?" (2025)

9. Mongabay India, "Namma Metro fare hike" (February 2025)

10. AUTOBICS, "India's Old Vehicle Ban" (June 2025)