Prime Minister Narendra Modi said India will continue to build new oil refineries to secure its supply chains even as Western countries shut down processing capacity, and credited the sector’s expansion with helping the country avoid the fuel shortages and price spikes that hit other countries during the West Asian conflict.
“In the United States, no new refinery has been built in the last 50 years. Refining capacity in Europe has declined steadily. At the same time, India has become the fourth largest refining country in the world. And we will not stop here – in the coming years, this capacity will increase further. These efforts have enabled India to fight and overcome the biggest energy crisis of the century,” Modi said on Saturday, while inaugurating the Bachpadra refinery in Balotra, Rajasthan, along with development projects. Worth approx $1.06 million crores.
He said that the war in West Asia has created the largest energy crisis of the 21st century, with many powerful countries facing fuel shortages, while India “made the right decisions at the right time, correctly assessed the situation, used its resources wisely and strengthened its diplomatic engagement,” describing India’s handling of the crisis as an “unprecedented” chapter.
He said India is particularly vulnerable because about 70% of its LPG demand depends on imports, nearly 90% of which is historically routed through Gulf states via the Strait of Hormuz.
He claimed that while some people were spreading rumors and creating panic, the Center was continuously working at the political and diplomatic levels to ensure that power supply was not interrupted. As the conflict disrupted shipping, the government redirected industrial gas into LPG production, adding 54,000 tons of supplies within a week, and reconfiguring refineries that had not previously produced LPG. Piped natural gas deliveries have also been accelerated, reaching more than 1.1 million households, Modi said.
Cylinder prices, which some estimates indicate may rise to approximately $2000, instead held near $950 for domestic consumers, according to Modi; Commercial LPG prices have also been reduced.
Modi said that crude oil prices rose from about $70 per barrel to about $120 after the conflict escalated. “In many countries, petrol and diesel prices have risen by 40-50% and fuel has been rationed. India has not witnessed such a situation even for a single day,” he said, adding that rumors and political criticism failed to undermine the government’s response. Modi estimated the losses of oil marketing companies during this period at more than $75,000 crores.
Sure enough, pump prices have been frozen at $94.77 for gasoline and $87.67 for diesel since March 2024 – a period during which international crude fell well below current levels, allowing state-run oil companies to make strong profits even as retail prices remained unchanged. This freeze continued during the first months of the West Asian crisis, as market management companies absorbed recovery shortfalls of up to… $26 liters of gasoline and $81.90 liters on diesel by late March, before the government cuts excise duty by 81.90 liters on diesel. $10 liters on both types of fuel – a relief that went to corporate balance sheets rather than the pump. Prices finally moved on May 15, rising cumulatively $7.35 liters of gasoline and $7.53 liters on diesel over the next 10 days – an increase of about 8%, against the 40-50% increases that Modi said other countries had imposed.
Modi said that India has also diversified its sources of crude oil from about 25 to 26 countries before the crisis to more than 40 countries now. “Our diplomacy has shown its strength. India has made it clear that the national interest and well-being of its citizens is paramount,” he said. He also referred to India’s management of fertilizer supply disruptions caused by the conflict in Ukraine.
Regarding the Pachpadra project itself, Modi said work slowed down between 2018 and 2023 under the previous Congress state government despite the signing of the agreement in 2017, and its pace picked up after the BJP returned to power in Rajasthan. He said: “We are not satisfied with laying the foundation stone, but rather we are completing the projects and dedicating them to the nation.” The refinery was scheduled to open two months ago, but the event was postponed after a fire broke out at the facility the day before the scheduled opening in April.
Modi also announced the Rajasthan-Haryana agreement to supply Yamuna water to Shekhawati district – covering Sikar, Churu, Jhunjhunu and adjoining districts – at an estimated cost. $34,000 crore, he said Rajasthan has emerged as a major hub for renewable energy. He also accused the Congress of neglecting the interests of Rajasthan and failing to address water scarcity in the state.
The inauguration ceremony drew a sharp reaction from the Congress, which accused the BJP of claiming credit for setting up the refinery under the United Progressive Alliance government and questioned the delay and cost escalation.
Former Rajasthan Chief Minister Ashok Gehlot rejected Modi’s claim that work had stopped under the Congress state government, calling it “unfortunate” that the Prime Minister “behaved like a BJP leader even at official government functions”. “The Prime Minister claimed that the project remained stalled during the Congress government from 2018 to 2023 and was completed in just two-and-a-half years under the BJP. Such statements appear ridiculous,” Gehlot wrote on X, adding that refinery officials would confirm that work continued during the Covid-19 pandemic and that nearly 85% of the project was completed during the tenure of the 2018-2023 Congress government.
Gehlot noted that the BJP government’s budget documents targeted a completion date of August 2025, meaning the refinery opened about a year behind schedule. He said the project originated under the United Progressive Alliance (UPA) government and credited then UPA president Sonia Gandhi and then Prime Minister Manmohan Singh for approving it. He noted that Sonia Gandhi and then Petroleum Minister M Veerappa Moily laid the foundation stone in 2013 after talks in which former minister Murli Deora also participated. Gehlot claimed that the project was halted for nearly five years “for political reasons”, resulting in higher costs, before work resumed at a rapid pace after the Congress returned to power in Rajasthan in 2018.
