As of December 01, 2020, India’s oil refining capacity stood at 259.3 million metric tonnes (MMT), making it the second-largest refiner in Asia. Private companies own about 35.29% of the total refining capacity in FY20.
India’s existing strategic oil reserves (SPR) is ~5.3 million tonnes.
Assam, Gujarat and Rajasthan account for more than 96% of oil production in India
According to IEA (India Energy Outlook 2021), primary energy demand is expected to nearly double to 1,123 million tonnes of oil equivalent, as the country's gross domestic product (GDP) is expected to increase to USD 8.6 trillion by 2040.
Crude oil production stood at 4.9 MMT in FY22 (April-May 2021) and was 30.5 MMT for FY21.
FY20, crude oil import increased to 4.54 mbpd from 4.53 mbpd in FY19. Natural Gas consumption is forecast to reach 143.08 million tonnes (MT) by 2040. India’s LNG import stood at 33.68 bcm during FY20. LPG penetration rate of households reached ~97% in early 2020 compared with 56% in 2016. India’s oil demand is projected to rise at the fastest pace in the world to reach 10 million barrels per day by 2030, from 5.05 million barrel per day in 2020.
According to the International Energy Agency (IEA), consumption of natural gas in India is expected to grow by 25 billion cubic metres (bcm), registering an average annual growth of 9% until 2024.
According to the International Energy Agency (IEA), India’s medium-term outlook for natural gas consumption remains solid due to rising infrastructure and supportive environment policies. Industrial consumers are expected to account for ~40% of India’s net demand growth. The demand is also expected to be driven by sectors such as residential, transport and energy.
India’s consumption of petroleum products grew 4.5% to 213.69 MMT during FY20 from 213.22 MMT in FY19. Exports of petroleum products from India reached 56.8 MMT in FY21 from 60.5 MMT in FY16. Diesel was the most-consumed oil product in India, accounted for 39% of petroleum product consumption in 2019. It is used primarily for commercial transportation and further, in the industrial and agricultural sectors.
India is set to expand India’s natural gas grid to 34,500 kms by adding another 17,000 km gas pipeline. The regasification capacity of the existing 42 MMT per annum will be expanded to 61 MMT per year by the year 2022.
Several initiatives have been taken by the Government of India, including the launch of Open Acreage Licensing Policy (OALP) and Coal Bed Methane (CBM) policy. It has allowed 100% Foreign Direct Investment (FDI) in companies and 49% in refining under the automatic route.
In July 2021, the Department for Promotion of Industry and Internal Trade (DPIIT) approved an order allowing 100% foreign direct investments (FDIs) under automatic route for oil and gas PSUs.
According to the data released by Department for Promotion of Industry and Internal Trade Policy (DPIIT), FDI inflows in India’s petroleum and natural gas sector stood at US$ 7.96 billion between April 2000 and June 2021. The Government is planning to invest US$ 2.86 billion in upstream oil and gas production to double the natural gas production to 60 bcm and drill more than 120 exploration wells by 2022. Further, rising demand for oil in India is expected to drive investment in refining capacity expansions and upstream production*. The Indian oil and natural gas sector is likely to witness an investment of US$ 206 billion in the next eight to ten years.
As of September 01, 2021, the sector’s total installed provisional refinery capacity stood at 246.90 MMT and IOC emerged as the largest domestic refiner, with a capacity of 69.7 MMT.
In September 2021, Indraprastha Gas Limited (IGL) signed a memorandum of understanding with South Delhi Municipal Corporation (SDMC) to build waste to energy plant in Delhi to fuel vehicles.
India aims to commercialise 50% of its SPR (strategic petroleum reserves) to raise funds and build additional storage tanks to offset high oil prices.
In July 2021, IndianOil Petronas Pvt. Ltd. announced its plan to establish a new brand for auto fuels retailing in India to further expand its business operations in the country.
In July 2021, Indian Oil Corporation (IOC) announced to establish India’s first green hydrogen plant at Mathura refinery to introduce green hydrogen activities and projects in oil and gas sector in the country.
In July 2021, the Minister for Road Transport and Highways, Mr. Nitin Gadkari inaugurated India’s first liquefied natural gas (LNG) facility plant in Nagpur, Maharashtra.
In July 2021, Oil & Natural Gas Corporation (ONGC) announced to spend Rs. 300 billion (US$ 4.03 billion) in FY22 to boost the oil & gas output.
To expand beyond the natural gas business, in July 2021, GAIL (India) Ltd. announced to invest ~Rs. 5,000 crore (US$ 670.18 million) to establish a portfolio of renewable energy targeting a capacity of at least 1 gigawatts and build plants for both compressed biogas and ethanol.
In July 2021, India diversified procurement for crude by announcing its first shipment from Guyana scheduled next month. This move also indicates a future roadmap for extended alliance with Guyana in the oil & gas sector.
In July 2021, Bharat Petroleum Corporation Ltd. (BPCL) announced plan to establish its first-generation ethanol production plant in Telangana at an estimated investment of Rs. 1,000 crore (US$ 134.04 million).
In July 2021, ONGC, an upstream oil company, and NTPC announced plan to expand the offshore wind energy development in India and accelerate presence in the renewable energy space.
As of December 31, 2020, Gas Authority of India Ltd. (GAIL) had the largest share (69.39% or 11,884 kms) of the country’s natural gas pipeline network (17,126 kms).
In October 2021, the Union Ministry of Petroleum & Natural Gas approved a revised project cost of Rs. 28,026 crore (US$ 3.8 billion) to increase refining capacity–for the ongoing Numaligarh Refinery Expansion Project–from 3 mmtpa to 9 mmtpa
In September 2021, Bharat Petroleum Corporation Ltd. (BPCL) announced its plan to invest over Rs. 1 lakh crore (US$ 13.66 billion), over a period of five years, to enhance petrochemical capacity and improve refining efficiency, gas proliferation, upstream oil & gas exploration and production and augment the (fuel) marketing infrastructure
In September 2021, Indian government approved oil and gas projects worth Rs. 1 lakh crore (US$ 13.46 billion) in Northeast India. These projects are expected to be completed by 2025.
In September 2021, India and the US agreed to expand their energy collaboration by focusing on emerging fuels. This was followed by a ministerial conference of the US-India Strategic Clean Energy Partnership (SCEP).
In June 2021, the government announced that it will auction unmonetised large oil and gas fields of state-owned ONGC and OIL to boost hydrocarbon production.
In February 2021, Prime Minister Mr. Narendra Modi announced that the Government of India plans to invest ~Rs. 7.5 trillion (US$ 102.49 billion) on oil and gas infrastructure in the next five years.
In Union Budget 2021, the government allocated funds worth Rs. 12,480 crore (US$ 1.71 billion) for direct benefit transfer of LPG (liquefied petroleum gas) and Rs. 1,078 crore (US$ 147.31 million) to feedstock subsidy to BCPL/Assam Gas Cracker Complex.
In Union Budget 2021, the Finance Minister announced to provide 1 crore more LPG connections under Pradhan Mantri Ujjwala Yojana (PMUY) scheme.
Oil Marketing Companies (OMCs) delivered 6.8 crore LPG cylinders to Pradhan Mantri Garib Kalyan Package (PMGKP) beneficiaries by May 20, 2020.
The total number of OMC retail outlets increased to 79,427, as of October 01, 2021 (P), from 59,595 in FY17.
In India, IOCL, as of October 01, 2021 (P), owned the highest number of retail outlets (32,888), followed by BPCL (19,251) and HPCL (19,216).
As of September 01, 2021 (P), there were 25,156 LPG distributors (under PSUs) in India.
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