Refining: From Crude Oil To Petroleum Products

S. Narayan*

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Oil production and refining in rising quantities entails that petroleum products speedily attain varied users, viz. industries, farmers, transporters or people – regardless of the gap and the difficulties in doing so. This has been the task of the petroleum advertising and marketing and distribution companies in India. By now, the, nation’s four oil advertising and marketing companies have developed an in depth infrastructures which may meet the necessities well timed and repeatedly, regardless of vast variations in terrain, local weather and demand sample.

Distribution System

At the time of Independence, like exploration and refining, the advertising and marketing of petroleum products was within the arms of the non-public multinational firms. To fulfil its socio-financial obligations, the event of marketing and distribution system for petroleum products in India has witnessed four distinct phases.

In India advertising of petroleum products began in 1882 with the availability of kerosene by Standard Oil Company. At the time of Independence, STANVAC (ESSO), Burmah Shell, Caltex and Indo-Burma Petroleum Co. had been advertising petroleum products within the nation.

In 1959, the Indian Oil Company (IOC), a Government firm, was formed for advertising of petroleum products. Indian Oil Firm, in competition with the well entrenched transnational oil corporations, set itself assiduously to the task of growing advertising and marketing infrastructure and distribution community. A significant policy decision was additionally taken then to permit only Indian Oil to handle imports of refined products and their marketing within the nation.

Between 1974 and 1976, the government acquired the assets of ESSO, Burmah Shell and Caltex. This resulted in establishment of Hindustan Petroleum Company and Bharat Petroleum Company. Finally, with the acquisition of belongings of Burmah Oil Company in 1981, the whole oil business come beneath government control.

In February 1993, the government launched parallel marketing of LPG, kerosene and low sulphur heavy stock by private parties so as to extend the availability of these merchandise. Accordingly, imports and pricing of those products for parallel marketing had been decontrolled under the scheme. The target of this scheme was to enable the affluent sections of the society to purchase these merchandise from the open market.

Import, blending and marketing of lubes was totally deregulated in November 1993. So as to advertise foreign funding and transfer of expertise for modernisation and upgradation of lubricants manufactured within the nation, the federal government has authorized formation of several joint enterprise firms. In this process, greater than 30 multi-national corporations (MNCS) are presently working in India equivalent to Mobil, Shell, Caltex, Fuchs, Exxon, Elf, Mitsubishi and Gulf.


Contemplating numerous benefits of pipeline transportation, it was felt fascinating to develop the product pipeline network in the nation to transport growing requirements of petroleum products. In view of this, the federal government of India has embarked upon an ambitious programme of growing product pipelines for which a separate holding company by the identify of “Petronet India Ltd.” has been formed. This holding company will implement pipeline proposals by means of subsidiaries and joint ventures (JV) for various pipelines with non-public participation.

To develop storage and allied facilities, the oil industry in India has taken up varied extra product tankage programmes to augment product tankage for petroleum products of mass consumption, commensurate with the growth in demand of petroleum products.

Inexperienced Fuels

To check additional deforestation and help in the upkeep of ecological balance and preservation of setting, oil corporations are releasing LPG connections on demand in all Union Territories (UTs), entire North-East, J&Ok, Himachal Pradesh and Delhi. Further, to improve the quality of environmental around Taj Mahal, the oil companies are releasing LPG connections on demand to the residents of Taj trapezium. New connections are also being launched in opposition to the surrender of kerosene quota by States like Andhra Pradesh, Maharashtra and Rajasthan. The oil corporations are releasing connections in giant numbers with a view to alleviating the people’s hardships and obtain the goal of releasing gas connections throughout the counter by the 12 months 2001-02, if not earlier. With a view to decreasing pollution, the usage of LPG within the automotive sector is being thought of by the government. Mandatory legislative and regulatory framework for safe usage of LPG as an automotive fuel is being pursued.

Additional, to examine deforestation and enhance the availability of kerosene for the weaker sections, a three% development in kerosene allocation within the States/UTs is being given since 1993, raising the nationwide per capita consumption to eleven.Forty one kg per particular person by 1997-98. Allocation of PDS kerosene has been elevated substantially for Orissa, Bihar, Madhya Pradesh, Rajasthan and Uttar Pradesh, which had a lower average per capita consumption, leading to an total increase in the allocation for the 12 months 1998-99.

To cut back pollution, unleaded petrol and additional-low sulphur diesel are being launched in a phased manner and these could be out there all through the country by early this yr. A phased programme for introduction of auto fuels meeting Euro-II norms could be put in place.

Compressed Pure Fuel (CNG) is used as a fuel in the transport sector in lots of nations. The benefit is that it’s protected and clean burning gasoline besides being environmentally friendly. It has been established that exhaust emissions like hydrocarbons and carbon monoxide are considerably decreased and toxic emissions corresponding to lead and sulphur are fully eliminated. CNG is being supplied in Delhi, Mumbai and Baroda to assist protect the surroundings. Its distribution is being made more intensive.

To encourage the use of pure fuel for energy technology and to supplement its availability within the nation, the government has taken initiative to import Liquified Natural Gas (LNG) in India. A joint venture firm, particularly Petronet LNG Ltd., has been promoted as a personal company, by major public sector oil corporations. Petronet LNG Ltd. is proposing to set up LNG terminals at Dahej (Gujarat) and Kochi (Kerala) . In addition, a lot of other multi-national companies are additionally planning to import LNG.


To minimise the demand of petroleum products without affecting economic activity and to reduce the import bill, excessive priority is being hooked up to the conservation of petroleum products. The Petroleum Conservation Analysis Affiliation (PCRA) is taking various steps to advertise conservation of petroleum products in the assorted end-consumer segments.

Hydrocarbon Vision 2025

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The Prime Minister had constituted a Particular Group of Ministers to work out the particular framework for creating India Hydrocarbon Vision 2025. Subsequently, six Sub Groups had been constituted in June 1999 to work out a method for exploration and infrastructure requirements based mostly on demand and provide projection, development and utilisation of natural fuel, together with LNG, restructuring of oil business, including disinvestment, position of the federal government and regulatory construction, pricing and tariff reforms and lengthy-time period exterior coverage of the Hydrocarbon sector including oil safety.

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