India to cut energy transition by half to aid oil refiners’ green projects in FY24
![India to cut energy transition by half to aid oil refiners’ green projects in FY24](https://sustainabilityeconomicsnews.com/wp-content/uploads/2024/01/101557857-1.webp)
India is intending to reduce equity investment by half, amounting to $1.8 billion for the fiscal year 2023/24, to support the green energy initiatives of three state-owned oil refiners, according to information from four sources in the government and industry.
This move comes as the federal government aims to restrain its fiscal deficit.
With Asia’s third-largest economy experiencing a revenue shortfall of over 40% from stake sales in state-run companies, there is a focus on managing spending to restrict the fiscal deficit to 5.9% of GDP for the current fiscal year ending in March.
Bharat Petroleum Corp and Hindustan Petroleum Corp, both state-run entities, aspire to achieve net-zero carbon emissions from their operations by 2040, while Indian Oil Corp has set a target for 2046.
To aid these companies in reaching their sustainability goals, the budget for this fiscal year included $3.61 billion (300 billion rupees) in equity support.
However, according to an industry and a government official, these funds will be disbursed gradually, with the government providing 150 billion rupees in equity support in the fiscal year 2023/24.
As the financial stability of the refiners is robust, and their capital expenditure needs for the current year do not necessitate the full 300 billion rupees, the government has reduced the amount, as per one source.
All sources familiar with the matter spoke anonymously as the details are pending approval by the federal cabinet to Reuters.
Despite emails from Reuters seeking comments, there has been no response from India’s oil ministry, finance ministry, and oil companies.
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