NOTES
THE OIL SCENARIO IN INDIA
A large variety of petroleum products are being used in the country. The
broad spectrum of petroleum products, their major usages, levels of consumption
and their percentage shares in the overall demand are given in Table 1.
Demand for Petroleum Products
The consumption of petroleum products in the country has been growing at a
rapid rate. The consumption of oil which stood at 17.9 MMT in 1970-71, rose to
29.88 MMT in 1979-80. The consumption 'figures for 1984-85 and 1989-90 and
the projected demand for the years 1994-95 and 1999-2000 are given in Table II.
NOTES
416
It would be seen that the demand for petroleum products which was 38.80
MMT in 1984-85 has increased to 53.82 MMT in 1989-90 and it is estimated to
go up to 77.74 MMT by the end of VIII plan and 101.26 MMT by the end of
IX Five Year Plan. This demand would be influenced not only by the ever growing population in the country, the growth in vehicle population, used for support
from petroleum sector for increased agricultural output, and increased transporta~
tion requirements, etc., but also by the other major projects envisaged in the
various sectors of the economy. During the VII Five Year Plan the year~wise
growth rate of the petroleum products was as shown in Table Ill.
TABLE
TABLE Ill. Growth ,i n the
Consumption of Petroleum Products.
II.
Consumption of Petroleum Products.
1984-85
38.80
1989-90
53.82
1994· 95 (Est.)
1999~2000
5.4%
6.8%
6.2%
7.3%
8.1%
1985-86
1986-87
1987-88
1988-89
1989-90
77.74
101.26
(Est.)
% Growth
Year
(Figs. in million metric tonnes)
The major part of our petroleum products consumption consists of middle
distillates, viz., kerosene and diesel which account for about 60% of the total
demand. During the last year, the growth rate of diesel consumption has been
10.7% which is particularly alarming because diesel as well aH kerosene are required
to be imported in the country to meet the demand. Estimates indicate that the
(;onsumption of petroleum products is expected to go up at a compound growth
rate of 7.2% and 5.4%, in VIn and IX Plans respectively (corresponding to the
projected'demand levels of 77.74 MMT and 101.26 MMT respectively in the terminal years of the Eighth and the Ninth Plans.
Imports of Petroleum Products
Since indigenous production of crude oil and petroleu.m products has been
less than the demand, the gap is sought to be bridged by import of crude oil and
petroleum products. Table IV shows the quantities of crude oil including petroleum
products imported during the last five years and their value.
TABLE IV. Crude/Product Imports
Qty= Million Tonnes (MMT)
Value=Rs. Cr.
-~-
Year
-
_ _ _ _ _
u~~
~ _ _ _ _ _ _
~~~
Crude oil
Qty.
Value
.. - - -
Product
Qty.
Value
----~-
-)274
.............
-
Total
Value
--.~~--
3.9
15.5
3687
2120
3.0
653
2773
17.7
2986
3.9
979
1988-89
17.8
2863
6.3
1516
3965
4379
1989-90
19.9
4034
6.5
2226
1985-86
15.1
1986-87
1987-88
~~-
.
... ---~~.
4961
6260
---"--
NOTES
411
It would be seen that (i) The volume of crude imports has increas~d from 15.1
MMT in 1985-86 to 19.9 MMT in 1989-90. Oil imports are being arranged from
.a number of countries which include USSR, Saudi Arabia, Iran, Iraq, United Arab
Emirates, Kuwait and Malaysia There are plans for further diversifying the
:sources of import.
(ii) The volume of product imports has also increased from 3.9 MMT in
1985-86 to 6.5 MMT in 1989-90. The bulk of the import of products is accounted
for by kerosene and diesel. The countries from where these products are being
imported include USSR, UAB, Bahrain. Kuwait.
Indigenous Crude Production
The indigenous crude is being produced by the Oil and Natural Gas Commission and Oil India Ltd. from" On-Shore Fields" located in Assam and in the
Western Region at Ankleswar, Gandhar and North Gujarat oil fields. Small quantities of crudes are also being produced in the Southern Region from Cauvery,
Krishna and Godavari Basins. The major share of indigenous crude production,
"however, is from the" Off-Shore Fields" 'located at Bombay High. The total indigenous crude production which was 11.8 MMT in 1979-80 had gone up to 30.2
MMT in 1985-86 and 34.1 MMT in 1989-90. For the current year (1990-91), the
indigenous crude production was estimated at 35.9 MMT. However, nearly 0.7
MMT of crude oil production has been lost in Assam due to agitations, etc..
In order to reduce the deficit between the demand for petroleum products and
the indigenous crude production, the crude production from indigenous sources.
<luring the VIII Five-Year Plan period is proposed to be increased as shown in
Table V.
TABLE V.
Projected Indigenous Crude Oil Production.
Year
(Figs. in MMT)
1990-91
35.9
1991-92
37.2
1992-93
38.7
1993-94
44.2
50.3
1994-95
The indigenous crude production target of 50.3 MMT in 1994-95 is subject to
:adequate outlays being made available for oil exploration and production activities.
Though the exploration and production of crude is a high priority area, the large
-outlays required for various other sectors of the economy and the competing
<iemands for allocation of available resources will be the governing factors which
would decide the availability of outlays for the oil and gas sector.
NOTES
418
Refining Capacity
There are twelve refineries operating in the country and the total installed
capacity of these refineries at present is about 51.85 MMT as shown in Table VI.
In order to minimise the gap between demand of petroleum products and the
refining capacity, a number of refining projects are being planned during the VII
and IX Five Year Plans. These include both' New Grass-root Refineries' as well as
'Expansion' of the existing refineries.
The existing refineries which are proposed to be expanded during VIII Plan are
shown in Table VII.
TABLE VI.
Installed Capacities of Refineries
Refinery
Installed Capacity
(Figs. in MMT)
Digboi
Guwahati
0.50
0.85
:1.35
3.30
2.75
7.50
9.50
6.00
5.50
5.60
4.50
4.50
Sl.SS
BRPL
Barauni
Haldia
Mathura
Koyali
BPCBombay
HPC Bombay
Madras Refinery
Cochin Retlnery
Visakh
Total
TABLE VII.
Expansion of Existing Refineries
Refinery
Digboi
Capacity Expansion
byMMTPA
0.15
Guwahati
0.15
MRL
0.90
BRPL
1.00
Koyali
3.00
Cochin
2.00
Total
7.20
In addition to the above expansion programme, the fonowing new grass-root
refineries are also proposed to be taken up.,
TABLE VIII.
New Grass Root Refineries
(Figs. in MMTPA)
Capacity
Refinery
0.5
Narimanam (Tamil Nadu)
N umaligarh (Assam)
3.0
6.0
Karnal (Haryana)
3.0
MangaJore (Karnataka)
12.5
Total
The oil industry bas also identified the need for thre(~ more grass-root refinerie&
of 6.0 MMTPA capacity ea.ch in Eastern, Western and Central India. These
grass-root refineries are expected to be commissioned in the IX Plan period.
With the implementation of the above expansion programme as weB as putting
up of the new grass-root refineries, which will be subject to adequate outlay&
becoming available, the existing refining capacity in the country which stands at
51.85 MMTPA is expected to go up to 66.75 MMTPA by the end of VIII Plan
(1994-95) and 92.55 MMTPA 'by the end of IX Plan (1999-2000).
-Reproduced/rom Urja 'J February 1991 with kind permission/rom the Publishers ..
I