Energy security as important as energy transition, fossil fuels to remain indispensable: GAIL CMD

New Delhi: GAIL (India) Limited Chairman and Managing Director (CMD) Deepak Gupta has said that energy security has become as important as the energy transition itself, and that fossil fuels will remain indispensable to India's growth, in a message to shareholders in the company's FY2025-26 annual report.

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"FY 2025-26 underscored a fundamental reality: energy security has become as important as energy transition," Gupta said in the message. He tied the conclusion directly to the year's supply shocks: "Geopolitical tensions in the Middle East, particularly the disruption of LNG supply chains through the Strait of Hormuz, exposed the vulnerability of global energy markets to concentrated supply sources and critical maritime routes."

How India and GAIL rode out the shock

Gupta framed the year as one that tested, and vindicated, a deliberately balanced national approach. He said India "strengthened natural gas infrastructure, expanded policy support for biofuels and city gas distribution (CGD), and introduced measures to enhance supply resilience during the geopolitical disruption," and argued that this "balanced approach — combining energy security, affordability and sustainability — will remain central to India's long-term energy transition."

Turning to how GAIL itself weathered the disruption, Gupta said, "During the disruption in global LNG markets, the Company responded with agility by optimising its sourcing portfolio, leveraging contractual flexibility, and working in close coordination with the Government, suppliers and customers to manage supply constraints." He credited the breadth of the company's LNG book, saying its "diversified long-term LNG sourcing portfolio across various supply geographies … played a vital role during the crisis," and that "the chartering of additional LNG vessels, strategic participation in LNG shipping, expansion of overseas trading capabilities and prudent commodity risk management further strengthened the resilience of our global LNG portfolio." He added that the experience "reaffirmed the importance of LNG supply diversification through long-term and portfolio supply based contracts in times of supply disruptions, and also the role played by spot LNG suppliers in maintaining supply continuance."

Fossil fuels

Setting out his forward view, Gupta argued that the transition would not be a straight-line move away from conventional fuels. "India's energy transition will be shaped not by a single fuel, but by a balanced and pragmatic energy mix," he said. "While renewable energy will expand rapidly, fossil fuels will remain indispensable for supporting economic growth, industrialisation and energy security."

He cast natural gas, GAIL's core business, as the connective tissue of that mix. "In this transition, natural gas will continue to play a pivotal role as the bridge between conventional and low-carbon energy systems, supported by its lower emissions, operational flexibility and an expanding national gas infrastructure," Gupta said, adding that GAIL "remains firmly aligned with India's vision of increasing the share of natural gas in the primary energy mix."

Gupta identified what he called the three pillars of long-term energy security. "As India moves towards a more gas-based economy, resilient infrastructure, diversified supply sources and market flexibility will remain the three pillars of long-term energy security," he said.

Hedging beyond molecules

Even as it defends the continued utilisation of hydrocarbons, GAIL is positioning for a lower-carbon future. "The energy company of the future must extend beyond molecules alone," Gupta said, adding that GAIL is "progressively expanding into new molecules and electrons — including biofuels, green hydrogen, renewable energy, carbon management, digital technologies and other emerging opportunities."

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Those moves include a commitment to cut Scope 3 emissions — largely generated when customers burn the gas GAIL sells — by 35 percent by 2040, alongside an existing target of net zero Scope 1 and Scope 2 emissions by 2035. The company has also earmarked Rs 3,800 crore for 700 MW of solar projects in Uttar Pradesh and Maharashtra, and signed MoUs to explore entry into the critical minerals value chain, with Khanij Bidesh India Limited (KABIL) and Hindustan Copper Limited, and a telecom tie-up with RailTel. GAIL described the critical minerals and telecom initiatives as exploratory.

Gupta closed with a statement of intent. "Our objective is clear: to build a more resilient, diversified and future-ready enterprise that creates sustainable value for shareholders while contributing meaningfully to India's long-term energy security and energy transition," he said.

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