The energy chain vitally depends upon the petroleum industry, hence petroleum is fundamental to economic and everyday lives. Petrochemical products cover the entire spectrum of daily use items ranging from clothing, housing, construction, furniture, automobiles, household items, toys, agriculture, horticulture, irrigation, and packaging to medical appliances. India’s refining sector is the 2nd largest in Asia with a total of 23 refineries.
The Government of India started encouraging energy companies to invest in refineries at the end of the 1990s, thus helping the country to become a net exporter of petroleum products in 2011, despite being a significant importer of crude oil. According to the Petroleum Planning and Analysis Cell, Crude Oil Processed by Refineries saw growth of 2.5% during April-December 2018 vis-a’- vis previous year. The production of petroleum products has substantially reduced to 188.86 MMT (Million Metric Tonnes) during April to December 2018 as compared to nearly 196.7 MMT in the corresponding period of 2017-18. The production trend from FY2011- FY2018 is given below:
|Year||Production of Petro-Products*||Growth(%)|
With substantial increase in refining capacity in India, exports of petroleum products have picked up since FY 2005-06, although the slowdown in global economy has affected the exports in recent years. Amidst an increasingly challenging environment of declining prices and rising competition, exports of petroleum products witnessed a sharp decline of (-) 73.13% during April-December 2018 to reach 46.8 MMT from 162.41 MMT in the corresponding period of FY18. However, the exports show positive growth from US$ 25155 million during April- December 2017 to US$ 30194 million in the corresponding period of FY19. During 2016-17, the exports recorded were 3.66% valuing US$ 31.70 billion, an increase from previous year’s decline of -46.15% at US$30.58 billion. The share of petroleum product exports in total exports has witnessed a consistent increase from 14.56% in FY 2010-11 to 20.09 % in FY 2013-14. However, this export share exhibited a decline in the fiscal year FY 2014- 15 to touch 18.3%and further to 11.66% and 11.48% during FY 2015-16 and FY 2016- 17 respectively.
|In 000’Million Tonnes|
|Year||2010 - 2011||2011 - 2012||2012 - 2013||2013 - 2014||2014 - 2015||2015 - 2016||2016 - 2017||2017 - 2018|
|Liquefied Petroleum Gas||154||174||200||227||254||195||317||359|
|Aviation Turbine Fuel(ATF)#||4478||4561||4664||5745||5520||5686||7271||7183|
|Superior Kerosene Oil||33||34||23||15||15||10||15||17|
|High Speed Diesel||20335||20407||22464||26469||25559||24037||27302||29717|
|Light Diesel Oil||98||84||9||30||6||0||151||18|
|Petcoke/ Carbon Black Feed Stock||-||-||-||-||-||-||-||-|
|Net Product Export||41698||44988||47054||51167||42631||31083||29226||31372|
|#Exports by Reliance Industries Ltd (RIL) does not include ATF to foreign going airlines, *RIL SEZ's MS export includes export of Alkylate Source: Ministry of Petroleum & Natural Gas|
Foreign Direct Investments
As per guidelines, 100% FDI is allowed through the automatic route in exploration activities of oil and natural gas fields, infrastructure related to marketing of petroleum products and natural gas, petroleum products’ pipelines, natural gas pipelines, LNG regasification infrastructure, market study, formulation and petroleum refining in private sector, subject to the existing sectoral policy and regulatory framework in the oil marketing sector and the policy of the government or private participation in exploration of oil and the discovered fields of natural oil companies.
FDI up to 49% is allowed through the automatic route in petroleum refining by PSU, without disinvestment of dilution of domestic equity in existing PSUs. During April 2000 - December 2018, petroleum and natural gas sector received FDI inflows of US$ 7003.67 million.
As per the BP Energy Outlook 2017, growth in energy consumption in 2016 was driven by the developing economies. China (1.3%, 47 mtoe (million tonnes of oil equivalent)) and India (5.4%, 39 mtoe) led the way, contributing almost identical increments, and together accounting for around half of the increase in global demand. India’s energy consumption grew at a similar rate to the recent past, underpinned by solid economic growth. Petrochemical industry contributes about 30 percent to India's chemical industry which is likely to become $250 billion by 2020 according to Dow Jones & Company.