[Economics] Petroleum in India

Economics

Petroleum in India

(01) India’s ranking in energy consuming:

·        Ranking energy consumers: China > US > Russia > India (4th largest)

·        by 2025: India will become 3rd largest consumer of energy

(02) Refineries in India:

Joint Venture	2
Private	3
Public Sector	17
Total	22

 (2.1) Joint Venture Refineries:

JV between	Where?
Bharat petroleum + Oman	Bina (Madhya Pradesh)
HPCL + Mittal	Bathinda, Punjab

(2.2) Private Refineries:

Reliance	1.              Jamnagar SEZ, Gujarat 2.              Mothikhavdi, Jamnagar, Gujarat
Essar	3.              Vadinar, Gujarat

(2.3) Public Sector Refineries:

1	IOCL	Guwahati, Assam	9	HPCL	Mumbai, Maharashtra
2	IOCL	Barauni, Bihar	10	HPCL	Vizag, Andhra Pradesh
3	IOCL	Koyali, Gujarat	11	BPCL	Mumbai, Maharashtra
4	IOCL	Haldia, West Bengal	12	BPCL	Kochi, Kerala
5	IOCL	Mathura, Uttar Pradesh	13	CPCL	Manali, Himachal Pradesh
6	IOCL	Digboi, Assam	14	CPCL	Nagapattinam, Tamil Nadu
7	IOCL	Panipat, Haryana	15	NRL	Numaligarh, Assam
8	IOCL	Bongaigaon, Assam	16	MRPL	Mangalore, Karnataka
			17	ONGC	Tatipaka, Andhra Pradesh

(03) Survey: Oil production challenges

·        Except KG basin and Rajasthan- all Indian oil fields are ageing, therefore declining production

·        Refineries are not upgraded, shortage of men, crude oil and capital.

·        Environmental issues, bandh/blockades aggravating the problem.

·        Solution: OVL should acquire more assets abroad.

(04) OVL assets abroad:

·        OVL: ONGC Videsh ltd.

·        Has petroleum assists in from Sudan, Vietnam, Venezuela, Brazil, Columbia, Russia, Syria and South Sudan.

·        But production declined due to Geopolitical problems in South Sudan & Syria.

·        OVL also has operations in South China Sea near the coast of Vietnam.

·        But China is objects, stating that the entire area belongs to them and Brunei, the Philippines and Vietnam have no rights over it.

·        Therefore, none of them can partner with India to explore hydrocarbons in South China Sea.

(05) Budget 2014: Diesel & LPG:

Diesel	LPG
§                  Will deregulate diesel, unless international crisis causes negative impact on crude oil supply (e.g. ISIS-Iraq, Syria, Israel-Palestine) §                  As such Government’s plan is to raise the diesel prices at 0.50 paisa per month. Thus by, December 2014 diesel will be completely “deregulated.”	§                  We’ll continue providing subsidized LPGs. §                  Earlier UPA Government had changed no. of subsidized LPGs to 6, then 9 and finally 12. §                  We’ll decide a “realistic” number of subsidized cylinders for each family.

(06) LPG Subsidy Mechanism:

	Subsidized Cylinder	Non – Subsidized Cylinder
Price	400+	1200+
By	Oily Ministry decides the price	PSU oil companies decide the price First of every month They use formula for average imported cost and rupee dollar rate during last month Additional cylinders have to be bought at market prices
2012	6 cylinders
2014 (UPA)	12 (after Rahul Gandhi demanded)
2014 (BJP)	Soon will decide a ‘reasonable’ number of subsidized cylinders

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