28 January 2025: PIB Summary For UPSC

India’s Petroleum Industry: Fueling Growth and Innovation

(Source – https://pib.gov.in/PressReleseDetail.aspx?PRID=2096817&reg=3&lang=1 )

Introduction to India’s Petroleum Industry

• India’s petroleum industry includes exploration, production, refining, distribution, and marketing of petroleum products.
• The sector is divided into upstream (extraction), midstream (transportation and storage), and downstream (refining and distribution) activities.
• India’s petroleum industry ensures energy security and supports economic activities.
• India has 19 public sector refineries, 3 private refineries, and 1 joint venture refinery.
• The country’s refining capacity has increased from 215.066 Million Metric Tons per annum (MMTPA) in 2014 to 256.816 MMTPA in 2024.

Origin and History

• India’s petroleum journey began in 1867 with the first oil well drilled in Digboi, Assam.
• The Indian Oil Corporation was established in 1959 to refine and distribute petroleum products.
• Over time, India’s petroleum industry expanded to meet both domestic and export needs.

Industry Development

• The 1990s saw economic liberalization, leading to more private and foreign investments.
• Public sector companies like ONGC and Indian Oil Corporation played key roles in exploration and refining.
• The development of modern refineries, such as the Jamnagar Refinery, has made India a major refining hub.
• India has 651.8 million metric tons of crude oil reserves and 1,138.6 billion cubic meters of natural gas reserves.

Recent Updates in the Petroleum Industry

• India aims to increase exploration acreage to 1 million square kilometers by 2030, with a 16% increase expected by 2025.
• The cost of a domestic LPG cylinder is among the lowest worldwide, priced at Rs. 803 for a 14.2 kg cylinder.
• The approval process for exploration and production has been streamlined from 37 to 18 processes.
• The Oilfields (Regulation and Development) Amendment Bill passed in 2024 supports policy stability for oil and gas producers.

Foreign Trade in Petroleum

• India’s refining capacity of over 250 million metric tonnes per annum allows it to cater to global markets.
• Key export destinations include South Asian, African, and European countries.
• The government’s focus on export growth and establishing Special Economic Zones has boosted petroleum exports.

Contribution to GDP

• The Gross Value Addition (GVA) from refined petroleum products increased from Rs. 1.56 lakh Crore in 2012-13 to Rs. 2.12 lakh Crore in 2022-23.
• The sector provides direct and indirect employment in exploration, refining, distribution, and retail, supporting other industries like petrochemicals and logistics.

Global Positioning

• India ranks in the top five globally for refining capacity and is the seventh-largest exporter of refined petroleum products.
• India is the second-largest country in ethanol blending and third-largest in biofuel production.
• India also has the fourth-largest LNG terminal capacity and refining capacity globally.

Technological Advancements

• The petroleum industry has embraced enhanced oil recovery (EOR) techniques and AI for better exploration and production.
• Refineries are adopting green technologies to reduce environmental impact.
• The industry is also focusing on alternative fuels like compressed biogas (CBG) and bio-refineries.

Government Initiatives

• Several government schemes aim to strengthen the petroleum sector, such as:
  • Pradhan Mantri JI-VAN Yojana for bio-ethanol production.
  • Strategic Petroleum Reserves to ensure energy security.
  • Ethanol Blending Program, with a target of 20% ethanol blending in petrol by 2025-26.
  • Expansion of City Gas Distribution Networks and investments in energy security.

Greener Fuels and Sustainability Initiatives

• The SATAT Initiative promotes compressed biogas production using agricultural residue and waste.
• Mission Green Hydrogen aims to produce 5 million metric tons of green hydrogen by 2030.
• National Bio-Energy Program focuses on bio-energy production and waste reduction.

Implications for Growth and Development

• The petroleum industry drives economic growth by increasing GDP, boosting foreign exchange, and supporting industrial expansion.
• It strengthens India’s political and energy independence.
• The industry also fosters rural development by improving energy access and creating jobs.

Conclusion

• India aims for substantial growth in refining capacity, ethanol blending, green hydrogen production, and exploration acreage by 2030.
• These efforts will help India maintain its global leadership in the energy sector while addressing environmental goals.