India will be critical driver of demand in next 30 yrs, international arrangements may change: Hardeep Singh Puri

India will be a critical driver of demand in the next 30 years, said Hardeep Singh Puri, Union Minister of Housing and Urban Affairs and Petroleum and Natural Gas. Speaking at the Express Adda in New Delhi on Friday, he also said the “international arrangements that are in place” were likely to change.

“We have a population which is economically more active, and our per capita consumption is one-third of the global average… I have a feeling the international arrangements that are in place are going to fundamentally change,” he said.

Puri was in conversation with Anant Goenka, Executive Director, The Indian Express, and P Vaidyanathan Iyer, Executive Editor, The Indian Express.

“Our biofuel blending in 2014 was 1.4 per cent, and today we are already blending 10 per cent. We had a target of 20 per cent for 2030 and we have brought that target forward to 2024-25. E-20 or Ethanol 20 per cent blended will be available on our petrol pumps, according to our ministry’s statement by April 1, 2023… And it may be well before that.

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“We are going for compressed biogas in a huge way. Yes, it is difficult and there are challenges to be faced, but when you have challenges of this kind you either convert them into opportunities or you get weighed down…,” he said.

On whether the world order is changing, Puri said, “Another way of addressing this is, are we witnessing a process which is already well embarked on deglobalization?”

“Have a look at what is happening inside the United States. The inflation rate in the US is the highest in 46 years. The Fed (US Federal Reserve) has just announced a steep increase in interest rates. The markets have already factored in that increase in interest rates…and the talk now is that of a similar increase in the coming months. So that is the United States.

“In Davos…the most important thing I found there is that Europe seemed to be preoccupied with itself… It took some gentle but assertive interaction to tell them that there is a world outside which today is beginning to face challenges…and we should not approach any one crisis in a manner that ends up exacerbating other crises,” Puri said.

The world is facing a food crisis, fuel crisis and fertilizer crisis, he said, adding that all three were interlinked.

“The global order which was established post the Second World War…I think the time has come to see if tweaking that is required to make it fit for the world…The world has changed rapidly,” the minister said.

On rising fuel prices he said, “You don’t need to be an economist to know that fuel prices at $120 a barrel make global economic activity unstainable…You are not looking at recession with a capital R, you are looking at even more serious things in the short term.”

Puri said the problem with fuel prices did not start with the beginning of Russian military action in Ukraine.

“If you tell those responsible for putting oil in the market, I mean OPEC+, and you say that oil prices continues to rise…the standard answer is that we don’t determine the price of oil we just determine how much quantity we put out…But if you put less than the demand, then you ensure that the price goes up.

“Three things have happened as a result of this (Russia-Ukraine) crisis…People have become extremely cautious because you don’t want the kind of impact on your consuming public which you are seeing in some countries around India…so you will diversify sources. Second, all this talk about the green energy transition — it will take place much faster…In India, we have dramatically enhanced our exploration and production,” Puri said.

On housing and real estate prices, the minister said, “Government has to make sure that it has a system in place which works, and the most glaring thing I found when I became the housing minister was…we did not have a regulator…A sector like construction, which along with agriculture and textiles are the three largest sectors in employment and contribution to the GDP, don’t have a regulator.”

The Express Adda is a series of informal interactions organised by The Indian Express Group and features those at the centre of change.

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