Hardeep Singh Puri: ‘Don’t clutter analysis of energy sector thinking who’s right or wrong on a political issue’

Our strategy has been highly successful… Our situation as of February 2022 was that the Russian Federation accounted for 0.2 per cent of our total (oil) imports… Today, I don’t think you should allow your analysis of the energy sector to get cluttered with thinking who’s right or wrong on a political issue… So, after Jan-Feb 2022, our imports from Russia shot up (as Russia offered cheaper oil)… As a democratically elected government, we had to ensure availability, affordability, and sustainability… We’ve done reasonably well on all three. We are the only country in the world where over a two-year reference period, (fuel) prices have actually come down… On Red Sea, I am repeatedly asked how worried I am. I’m anxious but not worried. My confidence stems from the fact that I don’t think any of the major state players involved in that part of the world wants an outright outbreak of hostilities.

Sukalp Sharma: With India buying more Russian oil, there are voices from the West who say that India might find itself on the wrong side of history by doing this. What’s your reaction?

The heart of the narrative is that somebody is financing the war machine. Luckily, they don’t say that, because the counter to that is a very strong one. I told my colleague, the external affairs minister: ‘You tell them that they buy more in an afternoon than I buy in a quarter.’ If you’re worried about filling the coffers of a country in war, then why didn’t you stop gas also? So, this is a very selective approach… We are absolutely clear in terms of policy. If you have a sanctioned country, we would not go into that; Russia was never under sanction. They (West) wanted a price cap. So, the underlying sentiment was to buy as much as you like but buy it cheaper. I think the use of that market card is what has stood us in good stead.

Sukalp Sharma: We are the world’s third-largest oil consumer depending on imports to meet over 85 per cent of our requirement. How have your discussions been with producer cartels on their production cuts?

I have never discussed with any foreign minister saying you must release (oil) otherwise prices will go up… You do what you like, I’ll do what I have to… There are new sources of oil coming into the market. There are Guyana, Suriname, Brazil and Namibia. Then you have green hydrogen and ethanol. As far as gas is concerned, I think by 2025-26, there’ll be more gas available. There are huge pipelines being laid in Africa also… Insofar as petroleum is concerned, you can limit the production, but you can’t stop the others. Some of the new countries are saying they will join OPEC, but they will not subscribe to their production cuts. What is the guarantee that all the guys who are part of that producers’ cartel do not want to sell more or are not selling? If I were a member of a team in a producing country, I would be very careful. The global situation can change suddenly… India is well-positioned and we are going full throttle with biofuels, compressed biogas and green hydrogen… So, things are changing.

India is where the energy story is really thriving. Exxon, Chevron, Petrobras, Petronas, BP — they all want to come to India… Why? Because this is where the growth is. This is where the growth in demand is

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Sukalp Sharma: Except for the excise duty cuts on petrol and diesel, at their end, the Oil Marketing Companies (OMCs) have not reduced prices for nearly two years now.

Is that a good thing or a bad thing? It’s a deregulated sector. Sometime in 2010 for petrol, and sometime in 2014 for diesel, a decision was made that we would not tell them (OMCs) what to do. But they’re good corporate citizens and they decided not to raise the price… If they had, we would have gone into a difficult situation, to the point where demand would have fallen, and we would have had political turmoil. We (government) step in sometimes. They (OMCs) lost about Rs 28,000 crore on gas and we compensated them by Rs 22,000 crore. They tell me that we have been a little less than reasonable because they lost about Rs 30,000 crore on petrol. I tell them that if I had a balance sheet like yours, I wouldn’t even look at that Rs 30,000 crore. We are giving them Rs 15,000 crore by way of equity infusion… It is fair to ask if they will bring down the prices, provided somebody can say there’s not going to be another global turbulence. Their profits for three quarters are good and the fourth quarter is also good, then you can start looking at these things.

Hardeep Singh Puri

Amitabh Sinha: At a G20 meeting, you said that India will most likely achieve its net zero status much before the target year of 2070. Can you share that assessment?

I said the net zero 2070 target, like all the targets that we set in this country, enjoys the benefit of a lot of care. We don’t want to do something unrealistic. That’s why we ended up as one of the countries which complies with its Paris commitments. If I look at the oil companies and their individual targets, they are between 2035 and 2045. Look at the speed with which we’re going into biofuels. You had a target of 20 per cent blending by 2030, you brought it forward to 2025. We have over 100 biogas plants functional and we are setting up another 100 or so in UP. You’re making second-generation ethanol from agricultural waste (parali)… Net zero is a very big thing for a developing country like India. But I think it can be done before 2070 and that’s the sentiment I was expressing.

No matter what the results of the US election, the India-US story will go on at a steady pace. In the sectors I work, there’s no room for philanthropy and altruism. You do solid investment because you want to make money out of it

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Amitabh Sinha: Even the green hydrogen target of 5 million metric tons…

It is too conservative. I see in the coming time that a company like Indian Oil Corporation will convert to green hydrogen. Others are doing the same thing. What do you need for green hydrogen? You need green energy at a reasonable cost… You need an electrolyser. Every electrolyser manufacturer in the world is in India today, either through collaboration or otherwise… Green hydrogen will succeed in places where there is local demand, there is local production, and there is local consumption, which leaves the United States, India and China. My take is that 5 million metric tons per annum is very conservative.

Amitabh Sinha: The Central Vista is your showpiece project. Are they model buildings for the entire world? Sustainability and energy efficiency-wise? If not, why not?

Anything that we do now, we make a conscious attempt to get the greenest technology. Will that situation change three years from now? I don’t know but I don’t think so. What we’re building now is for the next 50 to 200 years… Will that be a model? I think it’s already a model.

Jatin Anand: There is a view that all members of the Union Cabinet have been asked for the preference to contest Lok Sabha.

One prominent member has just been declared from Orissa — Ashwini Vaishnaw. Some members who’ve been in the Rajya Sabha for extended periods — some even had three terms — are young and would want to contest Lok Sabha because that is a different political dynamic. There are others, for instance, who have not even completed two terms. I’ve been a minister for seven years, but I still have a Rajya Sabha term for the next three years. As a party worker, you do what the party tells you to do. Many of them who are already announced in the electoral fray will admit that they’ve been told to contest or they want to contest and they are already looking at seats.

Jatin Anand: How do you see the BJP’s association with the Akalis playing out, especially in view of the farmers’ agitation?

As a member of the Cabinet and the Council of Ministers, I remember the representative of that party sitting inside the Cabinet and welcoming those farm laws then. The decision to leave was theirs. Secondly, I have never been fascinated by that alliance because it placed us in a subsidiary position in Punjab… If you are in an alliance, it has to be, at the very least, a relationship between equals… Also, for one party to say we are the true representatives of the Sikhs, where did you get that from? … Insofar as the farm agitation is concerned, the party’s senior leadership not only has a commitment to resolve issues but resolve them in a constructive, amicable manner.

Alliance (between AAP and Congress) will not work out if you are getting one seat out of seven. I don’t see any of them giving the other party three. Which means, BJP will win all seven

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Anil Sasi: With regards to the Russian oil flows, how tricky was it getting around the oil price cap? Do you see a temptation by the G7 to perhaps tweak the $60 cap?

First of all, we didn’t get around the price gap. The price cap suits me. If I can buy something cheaper, why would I want to buy it for a more expensive price? If somebody says there’s a price cap, shouldn’t I be going around and telling the supplier saying there is a price cap, you have to sell me for less? If it’s not doable, if they say shipping becomes a problem, that’s their problem. You have global turbulence… you’ve got a huge centre for supply in close proximity (to India) — the UAE, Iraq, Saudi Arabia, Qatar and Kuwait… Earlier, some of them used to charge an Asian premium. They have stopped that. Going forward, it’s largely going to be if you have the resource, who can buy it. We’re in the happy situation of being one of the few who can buy.

Minister of Petroleum and Natural Gas and Minister for Housing and Urban Affairs Hardeep Singh Puri in conversation with Sukalp Sharma, Senior Assistant Editor, at the Noida office. (Express photo by Tashi Tobgyal)

Mallica Joshi: What are your thoughts on the buzz around the Aam Aadmi Party and Congress alliance, especially in Delhi?

Have they got an alliance? They are giving them one seat and you call that an alliance. I have a reasonably good working knowledge of the Aam Aadmi Party and the Congress. It’s not happening in Punjab, I’d be surprised if it happens in Delhi… Even in the INDIA alliance, I used to say the test will come if you can engage in seat sharing. That never came… What is the internal dynamic of each party? I know for a fact that potential or aspiring candidates must all be lining up for an alliance. Alliance will not work out if you are getting one seat out of seven. I don’t see any of them giving the other party three. Which means, the BJP will win all seven.

Ritu Sarin: The Lutyens Bungalow Zone (LBZ) is an unfinished item on your agenda.

I don’t think that’s something that we have to look at just now. It’s a very interesting issue because a lot of people’s individual property interests would get covered by that. If their place is taken out of the LBZ, they can raise the height of their structure and get commercial profit… Half the people want out and half the people want in.

Harikishan Sharma: It seems that the government has not been able to find a suitable language to talk to farmers. Also, it seems there’s a growing distrust among farming communities. Does this worry you?

I must respectfully submit that I don’t agree with this. I think the Central government has gone out of its way to accommodate the legitimate interests of farmers… We are trying for a permanent solution for surplus, food stock and stockpiling.

Harikishan Sharma: Why has the BJP not been able to expand its base in Punjab?

With the gathbandhan, we were in an alliance where we were the junior partners. If you look at the vote base that the BJP has there, at any given point of time, it is pretty significant. I fought an election in Punjab. I was given only 17 days to prepare. I got 41.4 per cent of the vote which is a record vote… Everyone I know of, in the Congress Party, wants to join us.

Arunima Bharadwaj: The IEA member countries have recently agreed to start discussions on including India and giving it full membership. Where does this position India?

It’s a belated recognition of where India already is… India is where the energy story is really thriving. Exxon, Chevron, Petrobras, Petronas, BP — they all want to come to India… Why? Because this is where the growth in demand is. If you’re in the energy business, whether you are situated in Houston, Texas, which is in a way the energy capital, or you are in Sao Paulo, Brazil, or in Malaysia, they are interested in India… We’ve already got another 50 million metric tons per annum (new refining capacity) in the pipeline. In the new world which we are seeing take shape, we’ll have three or four refining hubs in the world… So, we’re very much part of the world.

Dheeraj Mishra: Do you think the Amitabh Kant report on real estate projects is working on ground? Also, should there be a mandatory clause that unless the builder pays 25 per cent of the dues, only then the registry will begin?

The principle of that report is that if you have a stuck project, the way to get it off the ground is by equal burden sharing, you take some shave here and there and you get the project going… Now if somebody had gone to NCLT before that, I can’t do anything about it. Issues arose essentially because land is such a valuable segment, we never had a regulator. And then RERA came in (2016 Act).

Earlier, a lot of people bought into land banks thinking the price would increase. Then suddenly the price dropped. The buyer was not looking at the fine print of the project. So, they got stuck with a builder. It was one-sided… If there are any remaining issues, I think under RERA or with the chief ministers of Haryana and UP, we’ll resolve them.

Ambreen Khan: Politics is a game of chess. How did you perceive politics when you were a diplomat and how different is it when you are a politician? What were the nightmares of a diplomat compared to that of a politician?

If you were to write one’s story in terms of the nightmares, I can tell you, I’ve had them both as a civil servant and as a politician… You have to do your job, but the roles are different… If you can sleep well, you won’t have nightmares, but I think in a country like India, there will be challenges. And most of those nightmares are caused by the press, by the way. It’s a story in the press which is likely to cause you a nightmare, not something else. How will this play out etc? Now, if you make the mistake of getting into it, you’ve had it, because you are wading right into it. That becomes the sticking point.

Sukalp Sharma: Donald Trump might return as US president, there is a war raging in the Middle East, in Palestine. How do you see these factors playing out for India?

I predicted Trump’s victory the first time around. On India, there is a bipartisan consensus in the United States. There’s also a bipartisan consensus on the United States in India. Fact is you have a vibrant Indian community in the US. Look at the kind of exchanges we have with the US in the area of technology, pure sciences. It’s a very different game… No matter what the results of the US election, the India-US story is going to go on at a steady pace. In the sectors I work, there’s no room for philanthropy and altruism. You do solid investment because you want to make money out of it. That is the spirit in which India-US will also succeed.