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Oil and Gas

September, 2012


About 93 per cent of India's energy comes from fossil fuels, wherein oil and gas accounts for about 43 per cent of the total energy produced from the same. Owing to the ever increasing demand of oil and gas, India has now become the fourth largest oil and gas consumer in the world after the US, China and Japan.

With the New Exploration Licensing Policy (NELP), India aims to bring in the much needed capital and state-of-the-art technology to the exploration sector. The policy also aims to create an investor-friendly climate. It is marked by attractive fiscal and contractual features and addresses the underground risks involved in exploration of sedimentary basin. The policy is very conducive to private investments and it can be assessed that India is gradually moving towards self reliance in the indigenous production of oil and gas.

Production and Consumption

Domestic public and private oil refiners processed 3.6 per cent more crude oil into products in July 2012, as against July 2011 to meet demand which grew 9.4 per cent year-on-year (y-o-y). Demand/consumption of petroleum products in July 2012 was boosted by liquefied petroleum gas (LPG), diesel and petrol sales.

Crude oil output in July 2012 was 3.256 million tonnes (MT).

Diesel & Petrol

Petroleum exports constitute the country’s single largest item of foreign exchange earner.

  • Diesel consumption increased to 5.735 MT in July 2012 from 5.073 MT in July 2011
  • The petrol consumption in July stood at 1.312 MT while LPG sales were at 1.321 MT, according to Petroleum Planning & Analysis Cell (PPAC)


Natural gas has increasingly become the preferred option globally, as it offers clean and low price energy equivalence to expensive liquid fuel.

  • Demand of natural gas in India was 179 million metric standard cubic meter per day (MMSCMD) during the year 2010-11
  • Natural Gas output for July 2012 stood at 3.577 billion cubic meter (BCM).