Lok Sabha Question No. 2277 (UNSTARRED), answered on 2018-12-24
Subject: Import of Crude Oil
Ministry: PETROLEUM AND NATURAL GAS
Asked by: P. KARUNAKARAN, PR. SENTHILNATHAN, MANSUKHBHAI DHANJIBHAI VASAVA, DHARMENDRA YADAV, PRITAM GOPINATH MUNDE, CHANDRAKANT BHAURAO KHAIRE, R. VANAROJA, Shrirang Appa Barne, K. MARAGATHAM, ANANDRAO  ADSUL, SHIVAJI ADHALRAO PATIL, RAKESH SINGH, R.K. BHARATHI MOHAN

## GOVERNMENT OF INDIA LOK SABHA

## UNSTARRED QUESTION NO. 2277

## TO BE ANSWERED ON 24 th  DECEMBER, 2018

## IMPORT OF CRUDE OIL

2277: SHRI P. KARUNAKARAN:

SHRI PR. SENTHIL NATHAN:

SHRI MANSUKHBHAI DHANJIBHAI VASAVA:

SHRI DHARMENDRA YADAV:

DR. PRITAM GOPINATH MUNDE:

SHRI CHANDRAKANT KHAIRE:

SHRIMATI VANAROJA  R.:

SHRI SHRIRANG APPA BARNE:

SHRIMATI  K. MARAGATHAM:

SHRI ANANDRAO ADSUL:

SHRI ADHALRAO  PATIL SHIVAJIRAO:

SHRI RAKESH SINGH:

SHRI BHARATHI MOHAN R.K.:

Will the Minister of PETROLEUM AND NATURAL GAS

- (a) whether the Government proposes to cut import dependence of oil/petroleum products by 10 per cent in 2022 and prepare a long term scheme for development of oil/gas and petroleum sector and if so, the details thereof along with the measures taken to reduce the import bill and prices of petroleum products especially petrol, diesel and LPG;
- (b) whether the experts have sketched the oil demand of the country to 458 million tonnes by 2040 and if so, the details thereof along with the steps taken by the Government to meet the energy demand and expand the refining capacity of the country;
- (c) the present refining capacity of the country, refinery-wise;
- (d) whether some countries have offered to meet the growing energy demands of the country and if so, the details thereof and the steps taken/being taken to make the country self-reliant

in the production of petroleum products and develop alternative pollution free cost effective fuel economy including ethanol blended petrol in the country;

(e) whether OPEC proposes to cut crude oil production which might result in increasing the prices of petrol/diesel in coming month and if so, the details thereof along with steps being taken to arrest the prices of petrol/diesel; and

(f) the present crude oil price for one barrel in the international market and subsequent cost of production for one litre petrol and diesel in the country along with monthly price of crude oil during 2017-18 and the current year?

## ANSWER

## MINISTER OF MINISTRY OF PETROLEUM AND NATURAL GAS (SHRI DHARMENDRA PRADHAN)

(a) Ministry is working in collaboration with various Central Government Ministries to achieve the goal to reduce the dependency on import from oil and gas by 10% by 2021-22. In this context, five-pronged strategy broadly comprises of increasing domestic production of oil and gas, promoting energy efficiency and conservation measures, giving thrust on demand substitution, capitalizing untapped potential in biofuels and other alternate fuels/ renewables and  implementing  measures  for  refinery  process  improvements.  Government  has  taken several steps to enhance exploration & production of oil and gas in the country which include inter-alia  Hydrocarbon  Exploration  Licensing Policy  (HELP)  and Open Acreage  Licensing Policy (OALP), Discovered Small Field (DSF) Policy, gas pricing reforms with premium for difficult  areas,  grant  of  marketing  freedom  for  gas  produced  from  difficult  areas,  National Seismic Programme for unappraised areas, National Data Repository, easing out rigidities in the  existing  Production  Sharing  Contracts  and  transparent  and  clear  policy  for  grant  of extension under the PSC regime, promoting and incentivizing Enhanced Recovery Methods to  improve  recovery  factor  of  existing  hydrocarbons  reserves  for  augmenting  domestic production  of  oil  and  gas  and  permitting  exploration  and  exploitation  of  unconventional hydrocarbons such as Shale oil/gas, Coal Bed Methane (CBM) etc.

Prices of petrol and diesel have been made market-determined by the Government with effect from  26.06.2010  and  19.10.2014  respectively.  With  an  aim  to  reduce  prices  of  petrol  and diesel, the Central Government reduced the Central Excise duty on petrol and diesel by ₹ 2 per  litre  with  effect  from  4 th October,  2017.  The  Central  Government  further  reduced  the Central Excise Duty on petrol and diesel by ₹ 1.5 per litre with effect from 5 th October, 2018 and public sector Oil Marketing Companies also reduced ₹ 1.0 per litre to reduce the overall price of petrol and diesel. The Central Government also requested the State Governments to make a reduction of ₹ 2.5 per litre in VAT imposed on petrol and diesel. Accordingly, 18 State Governments and 1 Union Territory have reduced VAT on petrol and diesel. Further, the  Government  continues  to  modulate  the  effective  price  to  consumer  for  subsidized domestic LPG.

(b) As per the report of the Working Group on Enhancing Refining Capacity by 2040, the refining  capacity  requirement  by  2040  is  projected  to  be  533  Million  Metric  Tonne  per Annum  (MMTPA)  to  meet  the  domestic  demand.  Further,  in  order  to  meet  the  rising domestic demand of fuel products, the refining industry has also planned for enhancing crude processing  capacity  through debottlenecking  of  existing assets,  expansion  of  existing refineries and grass-root refinery projects.

(c) The  present  refining  capacity  of  the  country  in  247.566  Million  Metric  Tonne  Per Annum (MMTPA), refinery wise details are at Annexure.

(d) Crude  oil  exporting  countries  have  expressed  their  interest  in  supplying  increased quantities  to  India.  Indian  oil  and  Gas  PSUs  also  remain  in  contact  with  multiple  source countries so as to maintain crude supplies to the country. Government is promoting the usage of environment friendly transportation fuel, i.e. CNG by expanding the coverage of City Gas Distribution  (CGD)  network  in  the  country.  Government  has  also  taken  a  number  of initiatives  to  encourage  the  use  of  alternative  fuels  like  ethanol  and  bio-diesel  through Ethanol Blending in Petrol (EBP) Programme and Bio-diesel blending in diesel. Government has notified a National Bio Fuel Policy 2018 to boost availability of biofuels in country.

(e) As per an OPEC press release in December, 2018, OPEC decided to adjust the overall production by 1.2 million barrel per day, effective as of January 2019 for an initial period of six months. India which has an Institutional Dialogue with OPEC, has urged OPEC members for responsible pricing which balances the interests of both consumers and producers.

(f) The price of Indian basket of crude oil as on 19.12.2018 is $55.49 per barrel. Refining of  crude  oil  is  a  process  industry,  where  crude  oil  is  processed  through  several  processing units.  Each  of  these  units  produces  intermediate  product  streams,  which  require  further reprocessing  and  blending.  As  it  is  difficult  to  apportion  the  total  cost  amongst  individual refined products, product wise costs are not identified separately. The monthly price of Indian basket  of  crude  oil  in  2017-18  and  current  year  may  be  seen  at  Petroleum  Planning  and Analysis Cell (PPAC) website www.ppac.org.in.

## Annexure

| Sr. No.                   | Refinery Location         | Name of the Company                           | Name Plate Capacity (MMTPA)*   |
|---------------------------|---------------------------|-----------------------------------------------|--------------------------------|
| CPSE Refineries           | CPSE Refineries           | CPSE Refineries                               | CPSE Refineries                |
| 1                         | Digboi, Assam             | Indian Oil Corporation Limited                | 0.650                          |
| 2                         | Guwahati, Assam           | Indian Oil Corporation Limited                | 1.000                          |
| 3                         | Barauni, Bihar            | Indian Oil Corporation Limited                | 6.000                          |
| 4                         | Koyali, Gujarat           | Indian Oil Corporation Limited                | 13.700                         |
| 5                         | Bongaigaon, Assam         | Indian Oil Corporation Limited                | 2.350                          |
| 6                         | Haldia, West Bengal       | Indian Oil Corporation Limited                | 7.500                          |
| 7                         | Mathura, U.P              | Indian Oil Corporation Limited                | 8.000                          |
| 8                         | Panipat, Haryana          | Indian Oil Corporation Limited                | 15.000                         |
| 9                         | Paradip, Odisha           | Indian Oil Corporation Limited                | 15.000                         |
| 10                        | Mumbai,Maharashtra        | Indian Oil Corporation Limited                | 7.500                          |
| 11                        | Visakhapatnam,            | Hindustan Petroleum Corporation Limited       | 8.300                          |
| 12                        | Andhra Pradesh Mumbai,    | Hindustan Petroleum Corporation Limited       | 12.000                         |
| 13                        | Kochi, Kerala             | Bharat Petroleum Corporation Limited          | 15.500                         |
| 14                        | Manali, Tamil Nadu        | Bharat Petroleum Corporation Limited          | 10.500                         |
|                           | Nagapattinam, Tamil Nadu  | Chennai Petroleum Corporation Limited         |                                |
| 15                        |                           | Chennai Petroleum Corporation Limited         | 1.000                          |
| 16                        | Numaligarh, Assam         | Numaligarh Refinery Limited                   | 3.000                          |
| 17                        | Mangalore, Karnataka      | Mangalore Refinery and Petrochemicals Limited | 15.000                         |
| 18                        | Tatipaka, Andhra Pradesh  | Oil and Natural Gas Commission                | 0.066                          |
| Total                     | Total                     | Total                                         | 142.066                        |
| JV Refineries             | JV Refineries             | JV Refineries                                 | JV Refineries                  |
| 19                        | Bina, Madhya Pradesh      | Bharat Oman Refinery Ltd.                     | 6.000                          |
| 20                        | Bathinda, Punjab          | HPCL Mittal Energy Ltd.                       | 11.300                         |
| Total                     | Total                     | Total                                         | 17.300                         |
| Private Sector Refineries | Private Sector Refineries | Private Sector Refineries                     | Private Sector Refineries      |
| 21                        | DTA-Jamnagar, Gujarat     | Reliance Industries Limited                   | 33.000                         |
| 22                        | SEZ, Jamnagar, Gujarat    | Reliance Industries Limited                   | 35.200                         |
| 23                        | Vadinar, Gujarat          | Essar Oil Limited                             | 20.000                         |
| Total                     | Total                     | Total                                         | 88.200                         |
| Grand Total               | Grand Total               | Grand Total                                   | 247.566                        |