Oil and gas industry in India
The petroleum industry in India dates back to 1889 when the first oil deposits in the country were discovered near the town of Digboi in the state of Assam.
[1][2] India imports 82% of its oil needs and aims to bring that down to 67% by 2022 by replacing it with local hydrocarbon exploration, renewable energy and indigenous ethanol fuel.
Natural gas gained further significance after the discovery of large reserves in the South Basin fields by ONGC in the 1970s.
[13][14] As of 1 April 2021, India had estimated crude oil reserves of 587.335 Mt, decreasing by 2.65% from the previous year.
[16] Building petroleum reserves like underground tank storage, above-ground tank storage, and fully developed and ready-to-exploit in situ reserves is a lucrative proposition for an oil-importing country like India as the oil exporters charge exorbitant prices when the oil demand is little more than supply.
[18][19][20] Strategic crude oil storages are at 3 underground locations in Mangalore, Visakhapatnam and Padur, Udupi district, Karnatka with ready access to the refineries on the east and west coasts.
Production of crude oil and natural gas declined by a compound annual growth rate (CAGR) of 2.44% and 5.47% respectively over the previous decade.
ONGC already has proved oil and gas reserves to the extent of 462.12 MMTOE at very low capex comparable with that of OPEC countries.
As on 31 March 2021, there were 23 crude oil refineries in India, of which 18 were state-owned, 3 were privately owned and 2 were joint ventures.
[37] This process generates a solid fuel called Pet coke which has higher calorific value and sulphur.
As developed countries have banned use of high sulphur pet coke and residual oils, these fuels further are converted in to synthetic natural gas and methanol in Methanation plants to avoid their disposal problem.
[39] Thus complete use of residual oil or pet coke in gasification unit would be part of petroleum refining complexes/plants in future to avoid waste products disposal.
[40][41] Due to the COVID-19 pandemic of 2020, refineries are forced to operate at lower capacities as the demand for petroleum products (mainly aviation turbine fuel and petrol) have fallen steeply.
After the implementation of IMO rules restricting use of high sulfur fuel oil (HSFO) by the marine vessels, the prices of HSFO have fallen so low compared to crude oil and using it has become more economical by the advanced refineries with vacuum distillation and coker units to produce petrol, diesel, pet coke, etc.
[15] Crude oil and natural gas are the second and third largest sources of electricity generated in India, after coal.
Despite the dependence on imports, India has developed sufficient processing capacity over the years to produce different petroleum products.
[47] Due to lack of adequate petroleum reserves, India has to depend mostly on crude oil imports for the near future till its renewable energy resources, such as solar, wind, hydro and biomass, are developed adequately to achieve energy security by replacing petroleum products consumption, which also significantly contributes to air pollution.
The share of oil from the Commonwealth of Independent States (CIS), which include Azerbaijan, Kazakhstan and Russia, nearly doubled to 43% mainly due to higher purchases from Moscow, the data shows.
[65] In March 2020, India announced that is increasing taxes on petrol and diesel to raise government revenues.
Many additional auto LPG and CNG stations have been planned due to high crude prices.
Shell currently has around 350 stations majorly present in the South and Western States of the country i.e. Tamil Nadu, Karnataka, Maharashtra, Telangana, Andhra Pradesh and Gujarat [71] Essar had 2,225 petrol stations in India which were supplied with petrol and diesel from its 280,000 barrels per day (45,000 m3/d) refinery in Vadinar, Gujarat.
[72] Indraprastha Gas Limited has opened exclusive CNG fuel stations in India, particularly in the capital city of Delhi.
In recent years, state oil marketing companies have been opening petrol stations, constructed with minimal investment,[clarification needed] in remote rural areas to help local farmers.
The numbers of petrol stations per owning company in the states and union territories of India as of 31 March 2016 were:[73]
