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India's Energy Security and Petroleum Economy

PYQs

8

Articles

1

Momentum

21

Phase IFoundation

Background

Overview

India's energy security is a multi-faceted challenge impacting its balance of payments, fiscal health, geopolitical relations, and long-term sustainable development goals. Fluctuations in global crude oil prices directly affect India's economy.

India's energy security is critically linked to its petroleum economy, characterized by a high dependence on crude oil imports, declining domestic production, and increasing demand for petroleum products. Ensuring a stable and affordable energy supply is vital for sustained economic growth and macroeconomic stability.

Phase IIStatic core

Facts & tables

Key facts

Import Dependence

Over 90% of crude oil imported in 2025-26.

Domestic Production Decline

Fell to 26 MMT in 2025-26 from a peak of 35.9 MMT in 2011-12.

Rising Consumption

Domestic consumption of PoL products increased to 243.2 MMT in 2025-26 from 90.6 MMT in 1998-99.

Refining Capacity

India has developed impressive crude oil refining capacity, aiding in cost savings.

Reference table

Static syllabus anchors

TypeReference
Conceptual areaExternal Sector & Capital Flows
Conceptual areaRenewable & Clean Energy

Reference table

Institutions & roles

BodyRole
Government of IndiaFormulates and implements energy policy, manages strategic reserves, promotes energy transition
Reserve Bank of IndiaMonitors macroeconomic impact of oil prices, influences monetary policy
Phase IIIExam lens

Prelims angle

Overview

Prelims angle: Factual recall

Prelims angle: Multi-statement analysis

Quick revision

  • India's crude oil import dependence exceeds 90%.
  • Domestic crude production has declined over time.
  • Rising demand for petroleum products.
  • Importance of strategic petroleum reserves and import diversification.
  • Need for accelerated transition to greener energy sources.

High-confidence PYQs

2022Conceptual understanding, Multi-statement analysis

Which of the following activities constitute the real sector in the economy? 1. Farmers harvesting their crops. 2. Textile mills converting raw cotton into ...

EconomyOpen question
2021Multi-statement analysis, Conceptual understanding

With reference to Indian economy, demand pull-inflation can be caused/increased by which of the following? 1. Expansionary policies 2. Fiscal stimulus 3. Inf...

EconomyOpen question
2020Multi-statement analysis, Conceptual understanding

Consider the following statements: 1. The weightage of food in Consumer Price Index (CPI) is higher than that in Wholesale Price Index (WPI). 2. The WPI doe...

EconomyOpen question

The term 'West Texas Intermediate', sometimes found in news, refers to a grade of

EconomyOpen question
2020Factual recall, Terminology-based question

Consider the following statements: 1. The weightage of food in Consumer Price Index (CPI) is higher than that in Wholesale Price Index (WPI). 2. The WPI doe...

EconomyOpen question

The term 'West Texas Intermediate', sometimes found in news, refers to a grade of

EconomyOpen question
2019Factual recall, Multi-statement analysis

Consider the following statements: 1. CoaI sector was nationalized by the Government of India under Indira Gandhi. 2. Now, coal blocks are allocated on a lot...

EconomyOpen question

Consider the following statements: 1. Purchasing Power Parity (PPP) exchange rates are calculated by comparing the prices of the same basket of goods and se...

EconomyOpen question
2019Statement-based questions, Factual recall

Consider the following statements: 1. CoaI sector was nationalized by the Government of India under Indira Gandhi. 2. Now, coal blocks are allocated on a lot...

EconomyOpen question

Consider the following statements: 1. Purchasing Power Parity (PPP) exchange rates are calculated by comparing the prices of the same basket of goods and se...

EconomyOpen question
2017Multi-statement analysis, Factual recall

Consider the following statements : 1. Tax revenue as a percent of GDP of India has steadily increased in the last decade. 2. Fiscal deficit as a percent of...

EconomyOpen question
2015Statement-based questions, Factual recall

With reference to the India economy, consider the following statements: 1. The rate of growth of real Gross Domestic Product has steadily increased in the l...

EconomyOpen question

Topic timeline

External Sector & Capital FlowsRenewable & Clean Energy
Prelims 2015· Statement-based questions, Factual recall

With reference to the India economy, consider the following statements: 1. The rate of growth of real Gross Domestic Product has steadily increased in the l...

Open question
Prelims 2017· Multi-statement analysis, Factual recall

Consider the following statements : 1. Tax revenue as a percent of GDP of India has steadily increased in the last decade. 2. Fiscal deficit as a percent of...

Open question
Prelims 2019· Factual recall, Multi-statement analysis

Consider the following statements: 1. CoaI sector was nationalized by the Government of India under Indira Gandhi. 2. Now, coal blocks are allocated on a lot...

Open question

Consider the following statements: 1. Purchasing Power Parity (PPP) exchange rates are calculated by comparing the prices of the same basket of goods and se...

Open question
Prelims 2019· Statement-based questions, Factual recall

Consider the following statements: 1. CoaI sector was nationalized by the Government of India under Indira Gandhi. 2. Now, coal blocks are allocated on a lot...

Open question

Consider the following statements: 1. Purchasing Power Parity (PPP) exchange rates are calculated by comparing the prices of the same basket of goods and se...

Open question
Prelims 2020· Multi-statement analysis, Conceptual understanding

Consider the following statements: 1. The weightage of food in Consumer Price Index (CPI) is higher than that in Wholesale Price Index (WPI). 2. The WPI doe...

Open question

The term 'West Texas Intermediate', sometimes found in news, refers to a grade of

Open question
Prelims 2020· Factual recall, Terminology-based question

Consider the following statements: 1. The weightage of food in Consumer Price Index (CPI) is higher than that in Wholesale Price Index (WPI). 2. The WPI doe...

Open question

The term 'West Texas Intermediate', sometimes found in news, refers to a grade of

Open question
Prelims 2021· Multi-statement analysis, Conceptual understanding

With reference to Indian economy, demand pull-inflation can be caused/increased by which of the following? 1. Expansionary policies 2. Fiscal stimulus 3. Inf...

Open question
Prelims 2022· Conceptual understanding, Multi-statement analysis

Which of the following activities constitute the real sector in the economy? 1. Farmers harvesting their crops. 2. Textile mills converting raw cotton into ...

Open question

India’s economic prospects after the West Asian crisis’

08 Jul 2026 · India's energy security is challenged by high crude import dependence, falling domestic output, and rising demand. Strategies include diversifying import sources, building strategic reserves, and accelerating transition to green energy.

Read article

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Practice writing on this topic

UPSC has asked 8 linked questions on India's Energy Security and Petroleum Economy in Mains. Write an answer to one — and get it evaluated.

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