C.I.S. on Price Hike of Petroleum Products

8/8/2019 C.I.S. on Price Hike of Petroleum Products

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Vignana Jyothi Institute Of Management1

Contents

INTRODUCTION ....................................................................................................................................... 2

Petroleum resources ............................................................................................................................ 5

World reserves .................................................................................................................................... 6

IMPACT OF OIL PRICES ON THE INDIAN ECONOMY .................................................................................. 8

MAJOR PRODUCTS OF OIL REFINERIES ..................................................................................................... 9

Asphalt ................................................................................................................................................ 9

Diesel fuel .......................................................................................................................................... 10

Fuel oil ............................................................................................................................................... 11

Gasoline............................................................................................................................................. 12

Kerosene ........................................................................................................................................... 13

Liquefied petroleum gas .................................................................................................................... 13

Lubricant ........................................................................................................................................... 14

Petrochemicals .................................................................................................................................. 16

OIL INTENSITY ACROSS COUNTRIES ........................................................................................................ 16

INDIAN CRUDE OIL REFINERY COMPANIES ............................................................................................. 17

Indian Oil Corporation limited (IOCL) ................................................................................................. 17

Hindustan Petroleum Corporation limited (HPCL) .............................................................................. 17

Bharat Petroleum Corporation limited (BPCL) .......................................................... .......................... 19

Oil and Natural Gas Corporation limited (ONGC) ....................................................... ......................... 20

Reliance petroleum limited (RIL) ........................................................................................................ 20

Essar group ........................................................................................................................................ 21

Indo-burma Petroleum Company limited (IBPCL) ............................................................................... 21

STASTICAL ANALYSIS ................................................................................... ........................................... 21

Consumption of Petrol ............................. .......................................................................................... 21

Consumption of Diesel ............................. .......................................................................................... 22

...................................................................................................................................................... 24

Prices of crude oil .............................................................................................................................. 24

MEAN .................................................................................................................................................... 35

TREND ANALYSIS ................................................................................................................................... 36


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CONCLUSION ......................................................................................................................................... 40

REFERENCES .......................................................................................................................................... 40


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INTRODUCTION

Crude oil is a naturally occurring, flammable liquid,unrefined, mineral liquid composed

principally of hydrocarbon, which accumulates in reservoirs beneath the Earth's surface and is

used as a source of energy.

Petroleum products are useful materials derived from crude oil (petroleum) as it is

processed in oil refineries

According to crude oil composition and demand, refineries can produce different shares

of petroleum products. Largest share of oil products is used as energy carriers: various grades

of fuel oil and gasoline. Refineries also produce other chemicals, some of which are used

in chemical processes to produce plastics and other useful materials. Since petroleum often

contains a couple of percent sulfur, large quantities of sulfur are also often produced as a

petroleum product. Hydrogen and carbon in the form of petroleum coke may also be produced as

petroleum products. The hydrogen produced is often used as an intermediate product for other oil

refinery processes such as hydrogen catalytic cracking (hydrocracking) and hydro desulfurization

A suitable place is found for drilling Depending on different depths (assuming its

offshore) the correct rig is dispatched. The rig is set up and a drill pipe is sent down (depending

on type of rock) then drilling fluid is sent down to the drill bit. Oil and gas is collected.

Crude oil in its natural form is useless to man so as soon as it is collected it is transported

to refineries by pipelines. Once crude oil reaches the refinery it goes through various processes to

become many different things. The first process is called distillation; this is where the crude oil is

separated for the first time. What happens is the crude oil is heated in turbine furnaces up to 380

degrees Celsius and this actually vaporizes the oil. It is then put into a distillation tower, also

called a fractioning tower.

A fractioning tower is a very tall tower, which has many different levels of condensers.

The condensers are set to catch the oil vapour as it rises up the tower. They are set with coolest

temperature at the top (40 C) and highest temperature at the bottom (370 C).


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The condensers then catch the vapour and turn it back into a liquid but in a much purer

state then it was in originally. The oil with the lowest boiling point is petroleum; it contains

hydrocarbons of 1-4 carbon atoms. The petroleum is pumped out of the tower and turned into

liquefied petroleum gas (lpg), also known as propane. It is a gas that has many uses, it is most

commonly used to fuel heaters and gas stoves. The next fraction out of the tower is gasoline,

which contains hydrocarbons of 5-12 carbon atoms. This gasoline is not quite ready to go in your

car yet. So, the refinery pumps it across a catalyst to increase its octane rating and then adds

many chemicals to it so it will perform well in a cars engine.

After gasoline is Kerosene consisting of 12-16 hydrocarbons. Kerosene has a few

different uses, it is probably best known as lamp and diesel fuel. But what you might not know is

that kerosene is also used to make gasoline, how they use it for gasoline will be explained later.The oil that has a lower boiling point than kerosene is gas oil; it contains hydrocarbons of 15-18

carbon atoms. Gas oil is used as heating oil for industries and it is also used to make gasoline.

The next to last oil out of the tower is lubricating oil stock which has the highest boiling point of

all the liquids mentioned above. It contains hydrocarbons of 16-20 carbon atoms. This is used for

lubricating oil in vehicles. The last liquid left at the very bottom of the tower is residue it

contains hydrocarbons of more than 20 carbon atoms. It is used to make asphalt and gasoline.

Now as mentioned above refineries take kerosene and gas oil and turn them into gasoline.

There are a few different methods, the most widely used is called cracking, because it uses heat

and pressure to crack the hydrocarbon molecules. Fluid catalytic cracking is the basic process

for making gasoline. First the oil is heated up to 1000 degrees Celsius. Then under low pressure

with a catalyst it converts heavy hydrocarbon molecules into smaller ones, which can be used for

gasoline.

Another popular method is hydro cracking which uses a similar processes as fluid

catalytic cracking. The difference between them is that hydrocracking uses lower heat and much

greater pressure. As for the residue that is not turned into asphalt, it is placed in a Coker. In the

Coker the refinery uses heat and moderate pressure to breakdown the hydrocarbons into gasoline

and a coal like substance used as an industrial fuel.


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The last thing that a refinery does is take the oil left over from cracking and turns it into a

usable fuel. This method is called Alkylation. The main purpose of this is to get a high-octane

fuel such as airplane fuel.Petroleum in its natural form has many limited applications.

Thankfully, it can be refined in the way that was explained above and have many more useful

products. Petrochemicals derived from petroleum became the source of such chemical products

as solvents, paints, plastics, synthetic fibres, soaps and cleansing agents, waxes and jellies,

explosives, and fertilizers. Fuels derived from petroleum power the engines of automobiles,

airplanes, ships, tractors, trucks and rockets.

Petroleum fuels generate a large portion of the worlds electrical-power supply. Asphalt

from petroleum is used to surface roads and high ways. It is also used as a lubricant in a great

variety of machines. Some of the products of the crude oil are sold to other refineries that makethings such as ammonia, crayons, life preservers, mascara, and yes-even bubble gum can be

made from crude oil.

Petroleum resources

Petroleum resources are distributed widely in the earths crust as gases, liquids, and

solids. The products derived from these naturally occurring resources are used principally as

energy sources, although substantial volumes serve as feed stocks in the chemical, plastics, and

other industries (see Feedstock). Petroleum resources are found as natural gas, as a variety ofliquids that are usually classified as normal or heavy crude oils, and as semisolid and solid

substances such as asphalt (qv), tar, pitch, Gilsonite, and many others. The petroleum resources

considered here are those liquid crude oils that can be produced through a conventional wellbore

by current primary, secondary, or tertiary (enhanced recovery) production techniques and those

unconventional crude oils that may be captured and converted into conventional sources of crude

petroleum by advancing production technologies.

No method has been devised to estimate with complete accuracy the amount of crude

petroleum that ultimately will be produced from the worlds conventional oil and gas fields.

Degrees of uncertainty, therefore, should be attached to all such estimates. These uncertainties

can be expressed in several ways, the most important of which is achieved by dividing a resource

into various categories. Several petroleum resources classifications have been proposed, and a


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comprehensive discussion of them (1), as well as the definition used in the assessment of the

undiscovered resources of the United States (2), have been provided. Seven commonly used

categories of resources are given here.

Resources represent the total amount (including reserves) of petroleum that exists in a

form and amount such that economic extraction is currently or potentially feasible.

Reserves constitute the petroleum that has been discovered and can be produced at the

prices and with the technology that exist when the estimate is made.

Proved reserves are estimates of petroleum reserves contained primarily in the drilled

portion of fields.

Indicated reserves constitute known petroleum that is currently producible but cannot be

estimated accurately enough to qualify as proved.

Inferred reserves are producible, but the assumption of their presence is based on limited

physical evidence and considerable geologic extrapolation. This place those on the borderline of

being considered undiscovered, and the accuracy of the estimate is very poor.

Sub economic resources constitute the petroleum in the ground that cannot be produced

at present prices and technology but may become producible at some future date at higher prices

or by improved technology.

Undiscovered resources are estimated totally by geological reasoning; no evidence

through drilling is available.

To various degrees, the conventional petroleum resources in many parts of the world

have been classified according to such a system. In certain regions, only estimates of proved

reserves are made routinely, whereas in the United States, Canada, and certain other regions,

estimates are made of volumes of petroleum in each of these categories. In the United States and

Canada, estimates for several of these categories (in particular, proved reserves) are made each

year by governmental agencies.

World reservesMost of the large volume of crude petroleum consumed in the world is extracted from

only a small fraction of the total number of oil fields discovered. The concentration of crude

petroleum in a few large fields is a consequence of the interaction of the geologic processes that

create and trap petroleum. Even though commercial quantities of petroleum have been


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discovered in many localities around the world, there are enormous volume differences in fields

present in a single region and in the total volume of petroleum present in different regions.

By far the largest known concentrations of conventional petroleum reserves are in the

Middle East, particularly in Saudi Arabia, the United Arab Emirates, and Kuwait. The largest

concentration of reserves is in the Burgan field in Kuwait, which contains about 68% of that

countrys reserves. The second largest concentration of reserves is in the Ghawar field in Saudi

Arabia, which is about 18% of that countrys reserves. In some regions, a large portion of the

reserves may not be contained in the largest field. However, the largest field usually contains

more than 10% of the total reserves of a region. More than 20,000 petroleum fields have been

discovered worldwide, and more than half of the worlds proved reserves of petroleum are

contained in only the 51 largest fields.

The worlds reserves of conventional petroleum have increased from this growth of in 13

years did not take place uniformly from region to region nor from year to year. Most of this

increase took place during two years, 1987 and 1989. These increases are the result of recording

of additional reserves in known fields as well as some new field discoveries, principally in the

Middle East.

Oil refineries will blend various feed stocks, mix appropriate additives, provide short term

storage, and prepare for bulk loading to trucks, barges, product ships, and railcars.

Gaseous fuels such as propane stored and shipped in liquid form under pressure in

specialized railcars to distributors.

Liquid fuels blending (producing automotive and aviation grades of gasoline, kerosene,

various aviation turbine fuels, and diesel fuels, adding dyes, detergents, antiknock additives,

oxygenates, and anti-fungal compounds as required). Shipped by barge, rail, and tanker ship.

May be shipped regionally in dedicated pipelines to point consumers, particularly aviation jet

fuel to major airports, or piped to distributors in multi-product pipelines using product

separators called pipeline inspection gauges ("pigs").

Lubricants (produces light machine oils, motor oils, and greases, adding viscosity stabilizers

as required), usually shipped in bulk to an offsite packaging plant.


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Wax (paraffin), used in the packaging of frozen foods, among others. May be shipped in bulk

to a site to prepare as packaged blocks.

Sulfur (or sulfuric acid), byproducts of sulfur removal from petroleum which may have up to

a couple percent sulfur as organic sulfur-containing compounds. Sulfur and sulfuric acid are

useful industrial materials. Sulfuric acid is usually prepared and shipped as the acid

precursor.

Bulk tar shipping for offsite unit packaging for use in tar-and-gravel roofing or similar uses.

Asphalt - used as a binder for gravel to form asphalt concrete, which is used for paving roads,

lots, etc. An asphalt unit prepares bulk asphalt for shipment.

Petroleum coke, used in specialty carbon products such as certain types of electrodes, or as

solid fuel.

Petrochemicals or petrochemical feedstock, which is often sent to petrochemical plants for

further processing in a variety of ways. The petrochemicals may be olefins or their

precursors, or various types of aromatic petrochemicals.

Petrochemicals have a vast variety of uses. They are commonly used as monomers or feed stocks

for monomer production. Olefins such as alpha-olefins and dienes are often used as monomers,

although aromatics can also be used as monomer precursors. The monomers are

then polymerized in various ways to form polymers. Polymer materials can be used

as plastics, elastomers, or fibers, or possibly some intermediate form of these material types.

Some polymers are also used as gels or lubricants. Petrochemicals can also be used as solvents or

as feedstock for producing solvents. Petrochemicals can also be used as precursors for a wide

variety of chemicals and substances such as vehicle fluids, surfactants for cleaners, etc.

IMPACTOFOILPRICES ONTHE INDIAN ECONOMY

Historically the Indian economy has been shielded against any sharp spike in oil prices.

The Administered Price Mechanism in the oil sector ensured that the impact of any sharpincrease in international oil prices were dissipated by spreading over the price increase through

smaller incremental hikes spread over a period of time. The oil pool account even then ran

substantial deficits, which was partially recharged when the international oil prices went into a

trough phase.


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Thus the Indian economy was generally protected against sharp spurt in oil prices Often

the Administered price mechanism has been dismantled in 2002 the retail prices of oil products

continues to be regulated by the government.

Increase in oil price also impacts on agriculture sector mainly through transport costs and

through impact on prices of inputs like fertilizers. In the case of manufacturing the higher fuel

prices and transportation costs raise cost of production and product prices, which impacts

negatively on demand conditions. High oil prices also increase the cost of services especially in

areas like tourism, community and personal services. Our analysis of the impact of oil price

increase on the Indian economy revealed that that among the different sectors of the economy the

only sector that had a strong negative relationship with oil prices was the manufacturing sector.

However, though the manufacturing sector is the most susceptible to oil prices increases, a

lagged impact spread over four years, allows the manufacturing sector to escape the full brunt of

oil price hikes, as a sustained increase in oil prices over two to three years is very unusual.

MAJORPRODUCTS OFOILREFINERIES

Asphalt

Diesel fuel

Fuel oil

Gasoline or petrol

Kerosene

Liquefied petroleum gas

Lubricant

Petrochemicals

Asphalt

Asphalt is a sticky, black and highly viscous liquid or semi-solid that is present in most

crude petroleum and in some natural deposits sometimes termed asphaltum. It is most commonly

modeled as a colloid, with asphaltenes as the dispersed phase and maltenes as the continuous

phase (though there is some disagreement amongst chemists regarding its structure).


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One writer states that although a "considerable amount of work has been done on the

composition of asphalt, it is exceedingly difficult to separate individual hydrocarbon in pure

form", and "it is almost impossible to separate and identify all the different molecules of asphalt,

because the number of molecules with different chemical structure is extremely large".

The largest use of asphalt is for making asphalt concrete for road surfaces and accounts

for approximately 85% of the asphalt consumed in the United States. Asphalt pavement material

is commonly composed of 5 percent asphalt cement and 95 percent aggregates.

Due to its highly viscous nature, asphalt cement must be heated so that it can be mixed

with the aggregates at the asphalt mixing plant. 80% of the asphalt removed each year from road

surfaces during widening and resurfacing projects is reused as part of new roads, roadbeds,

shoulders and embankments. Roofing shingles account for most of the remaining asphaltconsumption. Other uses include cattle sprays, fence post treatments, and waterproofing for

fabrics.

Asphalt is widely used in airports around the world. Due to the sturdiness, it is widely

used for runways dedicated to aircraft landing and taking off. Usually around 710% of the

whole aggregate mix, as opposed to rolled asphalt, which has only around 5% added bitumen.

This thermoplastic substance is widely used in the building industry for waterproofing flat roofs

and tanking underground. Mastic asphalt is heated to a temperature of 210 C (410 F) and isspread in layers to form an impervious barrier about 20 millimeters (0.8 in) thick.

Diesel fuel

Diesel fuel in general is any liquid fuel used in diesel engines and it is also High Spirit

Diesel (HSD). The most common is a specific fractional distillate of petroleum fuel oil, but

alternatives that are not derived from petroleum, such as biodiesel, biomass to liquid (BTL)

or gas to liquid (GTL) diesel, are increasingly being developed and adopted. To distinguish these

types, petroleum-derived diesel is increasingly called petro diesel.

Petroleum diesel, also called petro diesel,or fossil diesel is produced from the fractional

distillation of crude oil between 200 C (392 F) and 350 C (662 F) at atmospheric pressure,


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resulting in a mixture of carbon chains that typically contain between 8 and

21 carbon atoms per molecule

Petroleum-derived diesel is composed of about 75% saturated hydro carbons (primarily

paraffin including n, iso and cycloparaffins) and 25% aromatic hydrocarbons (including

naphthalene and alkylbenzens). The average chemical formula for common diesel fuel is C12H23,

ranging approximately from C10H20 to C15H28.

Fuel oil

Fuel oil is a fraction obtained from petroleum distillation, either as a distillate or a

residue. Broadly speaking, fuel oil is any liquid petroleum product that is burned in

a furnace or boiler for the generation of heat or used in an engine for the generation of power,

except oils having a flash point of approximately 40 C (104 F) and oils burned in cotton orwool-wick burners. In this sense, diesel is a type of fuel oil. Fuel oil is made of long

hydrocarbon chains, particularly alkanes, cycloalkanes and aromatics. The term fuel oil is also

used in a stricter sense to refer only to the heaviest commercial fuel that can be obtained

from crude oil, heavier than gasoline and naphtha.

Fuel oil is classified into six classes, numbered 1 through 6, according to its boiling point,

composition and purpose. The boiling point, ranging from 175 to 600 C, and carbon

chain length, 9 to 70 atoms, of the fuel increases with fuel oil number. Viscosity also increases

with number, and the heaviest oil has to be heated to get it to flow. Price usually decreases as the

fuel number increases.

Fuel oil is variously referred to as distillate fuel oils, diesel fuel oils, light fuel

oils, gasoil or just distillate. Distillate fuel oils are distilled from crude oil.

Gas oil refers to the process of distillation. The oil is heated, becomes a gas and then

condenses. Kerosene and is the fraction that boils off right after gasoline. The diesel fuel that

trucks and some cars run on, leading to the name "road diesel". It is the same thing as heating oil.

Distillate fuel oil and is rarely used. Residual fuel oils (RFO) or heavy fuel oils. What remains of

the crude oil after gasoline and the distillate fuel oils are extracted through distillation Fuel oil

is a mixture of 75-80 % and 25-20%.


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Residual fuel oils are sometimes called light when they have been mixed with distillate

fuel oil, while distillate fuel oils are called heavy when they have been mixed with residual fuel

oil. Heavy gas oil, for example, is a distillate that contains residual fuel oil. The ready

availability of grades of fuel oil is often due to the success of catalytic cracking of fuel to release

more valuable fractions and leave heavy residue.

Gasoline

Gasoline or petrol and also as Motor Spirit (MS) is a petroleum-derived liquid mixture

which is primarily used as a fuel in internal combustion engines. It is also used as a solvent,

mainly known for its ability to dilute paints. It consists mostly of alphatic hydrocarbons obtained

by the fractional distillation of petroleum enhanced with iso-octane or

the aromatic hydrocarbons toluene and benzene to increase its octane rating. Small quantities of

various additives are common, for purposes such as tuning engine performance or reducing

harmful exhaust emissions. Some mixtures also contain significant quantities of ethanol as a

partial alternative fuel.

Gasoline is produced in oil refineries. Material that is separated from crude

oil via distillation, called virgin or straight-run gasoline, does not meet the required

specifications for modern engines but will form part of the blend. The bulk of a typical gasoline

consists of hydrocarbons with between 4 and 12 carbon atoms per molecule (Commonly referred

to as C4-C12).

Many of the hydrocarbons are considered hazardous substances and are regulated in the

United States by the Occupational Safety and Health Administration. The material safety data

sheet for unleaded gasoline shows at least fifteen hazardous chemicals occurring in various

amounts, including benzene (up to 5% by volume),toluene (up to 35% by

volume), naphthalene (up to 1% by volume), trimethylbenzene (up to 7% by volume),

Methyl tert-butyl ether (MTBE) (up to 18% by volume, in some states) and about ten others

Gasoline was also used in kitchen ranges and for lighting, and is still available in a

purified form, known as camping fuel, white gas or Coleman fuel, for use in lanterns and

portable stoves.


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Kerosene

Kerosene is sometimes spelled kerosene in scientific and industrial usage, also known as

paraffin in UK and South Africa, is a combustible hydrocarbon liquid. The word Kerosene was

registered as a trademark by Abraham Gesner in 1854 and for several years only the North

American Gas Light Company and the Downer Company (to which Gesner had granted the

right) were allowed to call their lamp oil kerosene

Kerosene is widely used to power jet-engine aircraft (jet fuel) and some rockets, but is

also commonly used as a heating fuel and for fire toys such as poi. In parts of Asia, where the

price of kerosene is subsidized, it fuels outboard motors rigged on small fishing craft.

Kerosene is a thin, clear liquid formed from hydrocarbons, with density of 0.780.81

g/cm

3

. It is obtained from the fractional distillation of petroleum between 150 C and 275 C,resulting in a mixture of carbon chains that typically contain between 6 and

16 carbon atoms per molecule.

The flash point of kerosene is between 37 and 65 C (100 and 150 F) and its auto

ignition temperature is 220 C (428 F). The heat of combustion of kerosene is similar to that

of diesel: its lower heating value is around 18,500 Btu/lb, or 43.1 MJ/kg, and its higher heating

values 46.2 MJ/kg. Kerosene is immiscible in water (cold or hot), but miscible in petroleum

solvents.

Liquefied petroleum gas

Liquefied petroleum gas (also called LPG, GPL, LP Gas, or auto gas) is

a flammable mixture of hydrocarbon gases used as a fuel in heating appliances and vehicles. It is

increasingly used as an aerosol propellant and a refrigerant, replacing chlorofluorocarbons in an

effort to reduce damage to the ozone layer.

Varieties of LPG bought and sold include mixes that are primarily propane, mixes that

are primarily butane, and most common mixes including both propane C3H8 and butane C4H10,

depending on the season in winter more propane, in summer more butane. Propylene and

butylene are usually also present in small concentration. A powerful odorant, ethanethiol, is

added so that leaks can be detected easily. The international standard is EN 589.


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LPG is a low-carbon-emitting hydrocarbon fuel available in rural areas, emitting 81% of

the CO2 per produced by oil, 70% of that of coal, and less than 50% of that emitted by coal-

generated electricity distributed via the grid.

LPG is synthesized by refining petroleum or "wet" natural gas, and is usually derivedfrom fossil fuel sources, being manufactured during the refining of crude oil, or extracted from

oil or gas streams as they emerge from the ground. It was first produced in 1910 by Dr. Walter

Snelling, and the first commercial products appeared in 1912. It currently provides about 3% of

the energy consumed, and burns cleanly with no soot and very few sulfur emissions, posing no

ground or water pollution hazards. LPG has a typical specific calorific value of 46.1 MJ/kg

compared with 42.5 MJ/kg for fuel-oil and 43.5 MJ/kg for premium grade petrol

(gasoline). However, its energy density per volume unit of 26 kJ/l is lower than either that of

petrol or fuel-oil.

LPG will evaporate at normal temperatures and pressures and is supplied in

pressurized steel cylinders. They are typically filled to between 80% and 85% of their capacity to

allow for thermal expansion of the contained liquid. The ratio between the volumes of the

vaporized gas and the liquefied gas varies depending on composition, pressure, and temperature,

but is typically around 250:1. The pressure at which LPG becomes liquid, called its vapour

pressure, likewise varies depending on composition and temperature; for example, it is

approximately 220 kilopascals (2.2 bar) for pure butane at 20 C (68 F), and approximately

2.2 megapascals (22 bar) for pure propane at 55 C (131 F). LPG is heavier than air, and thus

will flow along floors and tend to settle in low spots, such as basements. This can cause ignition

or suffocation hazards if not dealt with.

Lubricant

A lubricant (sometimes referred to as "lube") is a substance (often a liquid) introduced

between two moving surfaces to reduce the friction between them, improving efficiency and

reducing wear. It may also have the function of dissolving or transporting foreign particles and of

distributing heat. A lubricant's ability to lubricate moving parts and reduce friction is the

property known as lubricity.


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One of the single largest applications for lubricants, in the form of motor oil, is protecting

the internal combustion engines in motor vehicles and powered equipment.

Typically lubricants contain 90% base oil (most often petroleum fractions, called mineral

oils) and less than 10% additives. Vegetable oils or synthetic liquids such ashydrogenated polyolefin, esters, silicones, fluorocarbons and many others are sometimes used as

base oils. Additives deliver reduced friction and wear, increased viscosity, improved viscosity

index, resistance to corrosion and oxidation, aging or contamination, etc.

Lubricants such as 2-cycle oil are added to fuels like gasoline which has low

lubricity. Sulfur impurities in fuels also provide some lubrication properties, which has to be

taken in account when switching to a low-sulfur diesel; biodiesel is a popular diesel fuel additive

providing additional lubricity.

Non-liquid lubricants include grease, powders, Teflon tape used in plumbing, air cushion

and others. Dry lubricants such as graphite, molybdenum disulfide and tungsten disulfide also

offer lubrication at temperatures (up to 350 C) higher than liquid and oil-based lubricants are

able to operate. Limited interest has been shown in low friction properties of compacted oxide

glaze layers formed at several hundred degrees Celsius in metallic sliding systems, however,

practical use is still many years away due to their physically unstable nature. Another approachto reducing friction and wear is to use bearings such as ball bearings, roller bearings or air

bearings, which in turn require internal lubrication themselves, or to use sound, in the case

of acoustic lubrication.

In addition to industrial applications, lubricants are used for many other purposes. Other

uses include cooking (oils and fats in use in frying pans, in baking to prevent food sticking), bio-

medical applications on humans (e.g. lubricants for artificial joints), ultrasound examination,

internal examinations for males and females, and the use of personal lubricant for sexualpurposes.


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Petrochemicals

Petrochemicals are chemical products derived from petroleum. Some chemical

compounds made from petroleum are also obtained from other fossil fuels such as coal or natural

gas, or renewable sources such as corn or sugar cane

Primary petrochemicals are divided into three groups depending on their chemical structure:

Olefins include ethylene, propylene, and butadiene. Ethylene and propylene are important

sources of industrial chemicals and plastics products. Butadiene is used in making synthetic

rubber.

Aromatics include benzene, toluene, and xylenes. Benzene is a raw material for dyes and

synthetic detergents, and benzene and toluene for isocyanates MDI and TDI used in

making polyurethanes. Manufacturers use xylenes to produce plastics and synthetic fibers.

Synthesis gas is mixture of carbon monoxide and hydrogen used to make

ammonia and methanol. Ammonia is used to make the fertilizer urea and methanol is used as

a solvent and chemical intermediate.

OILINTENSITYACROSS COUNTRIES

Oil intensity, or use of oil per unit of output, has reduced by half over the last 30 years in

the developed countries and by about one third in the developing countries. When nationaloutput is measured at market exchange rates the developing countries are seen to be less oil

efficient than the developed countries. For instance oil intensity in India and China was almost

four times that of the United Kingdom and almost double that of USA. However, when the

national outputs are adjusted for differentials in national price levels the differences in oil

intensity between developed and developing countries become very negligible. The ranking of

oil intensity across countries also gets substantially changed.

Our estimates for 2003 show that oil intensity adjusted for price differential in output in

India was the same as that in China and less than half of that in United States. Similarly in the

developed countries the oil intensity in real terms was the lowest in United Kingdom, followed

by Germany and France. Among developing countries the lowest oil intensity in real terms was


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in India and China followed by Brazil and Nigeria. The countries with the highest oil intensity in

real terms would include Canada, United States, Indonesia, South Korea and Thailand.

INDIAN CRUDE OILREFINERYCOMPANIES

INDIAN OIL CORPORATION LIMITED (IOCL)

HINDUSTAN PETROLEUM CORPORATION LIMITED (HPCL)

BHARAT PETROLEUM CORPORATION LIMITED (BPCL)

OIL AND NATURAL GAS CORPORATION LIMITED (ONGC)

RELIANCE PETROLEUM LIMITED

ESSAR GROUP

INDO-BURMA PETROLEUM COMPANY LIMITED (IBPCL) (now merged with

IOCL)

Indian Oil Corporation limited (IOCL)

Indian Oil began operation in 1959 as Indian Oil Company Ltd. The Indian Oil

Corporation was formed in 1964, with the merger of Indian Refineries Ltd. Indian Oils product

range covers petrol, diesel, LPG, auto LPG, aviation turbine fuel, lubricants, naphtha,

bitumen, paraffin, kerosene etc. Xtra Premium petrol, Xtra Mile diesel, Servo lubricants, Indane

LPG, Auto gas LPG, Indian Oil Aviation are some of its prominent brands. Indian OilCorporation limited (IOCL) is an Indian state-owned oil and gas company. It is Indias largest

commercial enterprise, ranking 105th on the Fortune Global 500 list in 2009. Indian Oil and its

subsidiaries account for a 47% share in the petroleum products market, 40% share in refining

capacity and 67% downstream sector pipelines capacity in India. The Indian Oil Group of

Companies owns and operates 10 of India's 19 refineries with a combined refining capacity of

60.2 million metric tons per year.

Hindustan Petroleum Corporation limited (HPCL)Hindustan Petroleum Corporation Limited (HPCL), a state-owned oil company of

the Government of India located at Mumbai, India and is a Fortune 500 company of India listed

at number 311in the global 500 rankings, with an annual turnover of over Rs. 1, 16,428 Crores

and sales/income from operations of Rs 1, 31,802 Crores (US$ 25,618 Millions) during financial


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year 2008-09, about 20% Marketing share in India and a strong market infrastructure.

Corresponding figures for financial year 2007-08 are: Turnover- Rs 1, 03,837 Crores, and

sales/income from Operations- Rs. 1, 12,098 Crores (US$ 25,142 Million).

HPCL operates 2 major refineries producing a wide variety of petroleum fuels &specialties, one in Mumbai (West Coast) of 6.5 Million Metric Tonnes Per Annum (MMTPA)

capacity and the other in Vishakhapatnam, (East Coast) with a capacity of 8.3 MMTPA. HPCL

holds an equity stake of 16.95% in Mangalore Refinery & Petrochemicals Limited (MRPL), a

state-of-the-art refinery at Mangalore with a capacity of 9 MMTPA. Another Refinery of 9

MMTPA is under construction in Bathinda, Punjab by HMEL, a Joint Venture with Mittal

Energy Investments Pte. Ltd.

HPCL also owns and operates the largest Lube Refinery in India producing Lube Base

Oils of international standards. With a capacity of 335 TMT. This Lube Refinery accounts for

over 40% of the India's total Lube Base Oil production. Presently HPCL produces over 300+

grades of Lubes, Specialties and Greases.

The marketing network of HPCL consists of 13 Zonal offices in major cities and 101

Regional officesfacilitated by a Supply & Distribution infrastructure comprising Terminals,

Aviation Service Facilities, LPG Bottling Plants, Lube filling plants, Inland Relay Depots, Retail

Outlets (Petrol Pumps) and LPG & Lube Distributorships.

HPCL has, over the years, moved from strength to strength on all fronts. The refining

capacity steadily increased from 5.5 million metric tonnes in 1984/85 to 13.00 million metric

tonnes (MMT) now. On the financial front, the turnover grew from Rs. 2687 crores in 1984-85 to

Rs 1, 31,802 Corers in Financial year 2008-09.

Petrol Known as Motor Spirit (MS) in Oil Industry. HPCL markets the product through

its retail pumps spread all over India. Its principle consumers are regular personal vehicle

owners.

Diesel Known as High Spirit Diesel (HSD) in Oil Industry. HPCL markets the products

through its retail pumps as well as terminals and depots. Its consumers are not only regular auto

owners but also transport agencies, industries etc.


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Lubricants HPCL are the market leader in lubricant and associated products. It

commands over 30% of market share in this sector. The popular brands of HP lubes are Laal

Ghoda, Milcy, Thanda Raja, Koolgard etc.

LPG A popular brand in mainly urban areas.Aviation Turbine Fuel With major ASF (Air

Service Facility) present in all major airports of India, HPCL is a key player in this sector

supplying ATF to major airlines. It has an accomplishment of sorts to supply fuel to US Air

Force 1. Bitumen, Furnace Oil.

BharatPetroleum Corporation limited (BPCL)

The 1860s saw vast industrial development. A lot of petroleum refineries came up. An

important player in the South Asian market then was the burmah oil company Ltd. Though

incorporated in Scotland in 1886, the company grew out of the enterprises of the Rangoon Oil

Company, which had been formed in 1871 to refine crude oil produced from primitive hand dug

wells in Upper Burma. The search for oil in India began in 1886, when Mr. Goodenough of

McKillop Stewart Company drilled a well near Jaypore in upper Assam and struck oil. In 1889,

the Assam Railway and Trading Company (ARTC) struck oil at Digboi marking the beginning of

oil production in India.

Bharat Petroleum Corporation Limited (BPCL) is one of the largest state-

owned oil and gas company in India, with Fortune Global 500 rank of 287 (2008). Its corporate

office is located at Ballard Estate, Mumbai. As the name suggests, its interests are in downstream

petroleum sector. It is involved in the refining and retailing of petroleum products.

Bharat Petroleum is considered to be a pioneer in Indian petroleum industry with various

path-breaking initiatives such as Pure for Sure campaign, Petro card, Fleet card etc.

BPCL's growth post-nationalization (in 1976) has been phenomenal. One of the single

digit Indian representatives in the Fortune 500 & Forbes 2000 listings, BPCL is often referred to

as an MNC in PSU garb. It is considered a pioneer in marketing initiatives, and employs Best

in Class practices.

Bharat Petroleum produces a diverse range of products, from petrochemicals and solvents

to aircraft fuel and specialist lubricants and markets them through its wide network of Petrol


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Stations, Kerosene Dealers, LPG Distributors, Lube Shoppes, besides supplying fuel directly to

hundreds of industries, and several international and domestic airlines.

Oil and Natural Gas Corporation limited (ONGC)

In August 1960, the Oil and Natural Gas Commission was formed. Raised from mere

Directorate status to Commission, it had enhanced powers. In 1959, these powers were further

enhanced by converting the commission into a statutory body by an Act of Indian Parliament.

Oil and Natural Gas Corporation Limited (ONGC) (incorporated on 23 June 1993) is a

state-owned oil and gas company in India. It is a Fortune Global 500 company ranked 152nd,

and contributes 77% of India's crude oil production and 81% of India's natural gas production. It

is the highest profit making corporation in India. It was set up as a commission on 14 August

1956. Indian government holds 74.14% equity stake in this company.

ONGC is one of Asia's largest and most active companies involved in exploration and

production of oil. It is involved in exploring for and exploiting hydrocarbons in 26 sedimentary

basins of India. It produces about 30% of India's crude oil requirement. It owns and operates

more than 11,000 kilometers of pipelines in India.

Reliance petroleum limited (RIL)

Reliance Petroleum Limited was set up by Reliance Industries Limited (RIL), one ofIndia's largest private sector companies based in Mumbai. Currently, RPL is subsidiary of RIL,

and has interests in the downstream oil business. RPL also benefits from a strategic alliance with

Chevron India Holdings Pte Limited, Singapore, a wholly owned subsidiary of Chevron

Corporation USA (Chevron), which currently holds a 5% equity stake in the Company. Refining

activities of Reliance Industries Limited are carried out at the Jamnagar refinery complex with

refining capacity of 27 million tonnes per annum (540,000 barrels per day).

The refinery is able to process a wide variety of crudes- from very light to very heavy

(from 18 to 45 degree API) and from sweet to very heavy (with sulphur content from 0 to 4.5%).

RPL commenced its crude processing on 25 December 2008. The secondary processing

units are now under synchronization and commissioning. The entire refinery complex is

expected to attain full capacity shortly. With an annual crude processing capacity of


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580,000 barrels (92,000 m3) per stream day (BPSD), RPL will be the sixth largest refinery in the

world. It will have a complexity of 14.0, using the Nelson Complexity Index, ranking it amongst

the highest in the sector. The polypropylene plant will have a capacity to produce 0.9 million

metric tonnes per annum.

Essar group

The Essar Group is a multinational conglomerate corporation in the sectors of Steel,

Energy, Power, Communications, Shipping Ports & Logistics as well as Construction

headquartered at Mumbai, India.

Essar began as a construction company in 1969 and diversified into manufacturing,

services and retail. Essar Steel produces customized products catering to a variety of product

segments and is India's largest exporter of flat products to the US and European markets, and tothose of South East Asia and the Middle East.

Indo-burma Petroleum Company limited (IBPCL)

IBP was originally founded by Abdul Karim Abdul Shakur Jamal under the name of

Jamal's oil Company limited and was renamed as Indo-Burma Petroleum Company limited in

1909. On 2 May 2007, IBP was merged with Indian Oilthe oldest oil company in India.

IBP Co. Limited was born in the then undivided British India as Indo-Burma Petroleum

Company Limited a joint stock private company on 08-02-1909 at Burma, presently Myanmar.

The developments that followed Second World War forced the company change its headquarters

to Kolkata permitting the British Government to bombard and destroy its only refinery at

Rangoon. Thereafter the company joined hands with the then Indian Oil Company (Later formed

as Indian Oil Corporation Limited after merger with Indian Refineries Company Limited) and

carried out business in petroleum products at Mumbai and Kolkata.

STASTICALANALYSIS

Consumption ofPetrol

Petrol is largely an item of final consumption. Its price, therefore, has a very small impact on

inflation due to forward linkages. The average annual use of petrol per vehicle is given bellow


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Type

of

Vehicle

Average

Distance

Coveredannually (KM)

Fuel

Efficiency

(KM/Litre)

Litres/

Vehicle/

Year

Monthly Fuel

Cost at price

on 1.1.10 inDelhi (Rs)

Two Wheelers

(Petrol)

6300

(10000)

73.0 86 320

Three Wheelers

(Petrol)

35000

(40000)

34.0 1,029 3835

Cars(Petrol)

8000(15000)

13.5 593 2210

SOURCE: Residential and Transport Energy use in India: Past Trend and Future Outlook by

Ernest Orlando Lawrence Berkeley National Laboratory, USA, and January 2009

Table - I (Average Annual Consumption of Fuel by Class of Vehicles)

Consumption ofDiesel

The consumption of diesel by different users in 2008-09. Trucks accounted for 37% and

buses 12% of total diesel consumption in 2008-09. Agricultures share was 12%.

Type

of

Vehicle

Average

Distance

Covered

annually (KM)

Fuel

Efficiency

(KM/Litre)

Litres/

Vehicle/

Year

Monthly Fuel

Cost at price

on 1.1.10 in

Delhi (Rs)

Cars(Diesel)

8000(15000)

14.0 571 1566

MPV

(Diesel)7800

(37000)8.7 897 2461


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Bus

(Diesel)55000

(60000)4.1 13,415 36,802

Heavy Trucks(Diesel)

55000

(35000)3.6 15,278 41,913

Light Trucks(Diesel)

20000(40000)

4.5 4,415 12,112

SOURCE: Residential and Transport Energy use in India: Past Trend and Future Outlook by

Ernest Orlando Lawrence Berkeley National Laboratory, USA, and January 2009

Table - II (Average Annual Consumption of Fuel by Class of Vehicles)


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SOURCE:Petroleum Planning and Analysis Cell(PPAC)

Graph - I (User-wise percentage share in total diesel consumption, 2008-09)

Prices of crude oil

The data contains crude oil cost in every month of year 2005, 2006, 2007, 2008, and

2009. In Dollar ($) per barrel (bbl).

Industry

10%

Railways

6%

Agriculture

12%

Power Generators8%

Passenger cars

15%

Buses

12%

Truks

37%

User-wise percentage share in total diesel

consumption, 2008-09


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Price of crude oil in 2005 for a barrel in $

MONTHS PRICE OF CRUDE OIL FOR BARREL IN $

JANUARY 80.38 $

FEBRUARY 83.2 $

MARCH 95.37 $

APRIL 94.94 $

MAY 89.71 $

JUNE 101.09 $

JULY 105.71 $

AUGUST 115.97 $

SEPTEMBER 115.58 $

OCTOBER 109.03 $

NOVEMBER 103.19 $

DECEMBER 105.83 $

Table III (crude oil price of 2005 in $)

Barrel = 159 liters of crude oil


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GRAPH II (crude oil Price of 2005 in $)

OBSERVATION:

In the above graph the crude oil cost is increased more in august and September month and it

reduced and it is again increased in December

0

20

40

60

80

100

120

140

JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC

crude oil Price of 2005 in $

crude oil

Price of 2005

in $


27/41




JANUARY 117.11 $

FEBRUARY 112.09 $

MARCH 114.31 $

APRIL 127.6 $

MAY 128.84 $

JUNE 128.15 $

JULY 135.97 $

AUGUST 134.81 $

SEPTEMBER 116.62 $

OCTOBER 108.78 $

NOVEMBER 109.22 $

DECEMBER 114.52 $

TABLE IV (crude oil Price of 2006 in $)



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GRAPH III (crude oil Price of 2006 in $)

OBSERVATION:

In the above graph the crude oil cost is increased more in July and august month and it reduced

to less than January in December.

0

20

40

60

80

100

120

140

160

jan feb mar apr may jun jul aug sep oct nov dec

crude oil Price of 2006 in $

crude oil

Price of

2006 in $


29/41




JANUARY 100.52 $

FEBRUARY 108.08 $

MARCH 113.85 $

APRIL 122.28 $

MAY 122.52 $

JUNE 128.08 $

JULY 138.12 $

AUGUST 131.63 $

SEPTEMBER 144.05 $

OCTOBER 153.84 $

NOVEMBER 171.38 $

DECEMBER 168.05 $

TABLE V (crude oil Price of 2007 in $)



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GRAPH IV (crude oil Price of 2007 in $)

OBSERVATION:

In the above graph the crude oil cost is increasing and reducing in this year from month to month

and it is highly increased in November.

0 50 100 150 200

jan

feb

mar

apr

may

jun

jul

aug

sep

oct

nov

dec

price of crude oil in 2007 in $

price of crude

oil in 2007 in $


31/41




JANUARY 170.25 $

FEBRUARY 175.34 $

MARCH 191.1 $

APRIL 204.24 $

MAY 230.52 $

JUNE 247 $

JULY 249.66 $

AUGUST 215.3 $

SEPTEMBER 187.06 $

OCTOBER 136.34 $

NOVEMBER 101.25 $

DECEMBER 77.71 $

TABLE VI (crude oil Price of 2008 in $)



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GRAPH V (crude oil Price of 2007 in $)

0

50

100

150

200

250


crude oil price of 2008 in $

crude oil

price of 2008

in $


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OBSERVATION:

In the above graph the crude oil cost is increased more in June and July month and it reduced to

lowest cost in December.



JANUARY 82.58 $

FEBRUARY 78.83 $

MARCH 87.89 $

APRIL 94.55 $

MAY 109.28 $

JUNE 129.99 $

JULY 121.64 $

AUGUST 134.69 $

SEPTEMBER 128.47 $

OCTOBER 139.21 $

NOVEMBER 145.82 $

DECEMBER 140.86 $

TABLE VII (crude oil Price of 2009 in $)



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GRAPH VI (crude oil Price of 2007 in $)

0

20

40

60

80

100

120

140

160


crude oil price of 2009 in $

crude oil

price of

2009 in $


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OBSERVATION:

In the above graph the crude oil cost is increased from January to December.

MEAN

Mean means approximating the statistical norm or average or expected value

Mean of the years 2005, 2006, 2007, 2008 and 2009

YEARS MEAN

2005 100 $

2006 120.6683 $

2007 133.5333 $

2008 182.1475 $

2009 116.1508 $

TABLE VIII (Mean of the crude oil Price in $)


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GRAPH VII (Mean of the crude oil Price in $)

OBSERVATION:

In the above graph the mean of crude oil cost is increased at high in year 2008 and it reduced in

2009 comparatively.

TRENDANALYSIS

Trend analysis mean analysis of changes over time or Trend analysis is taking past results to

predict future performance.

Trend analysis of the price of crude oil

y= a + bx

Where as

a = y/number of years

b = xy/ x2

0

20

40

60

80

100

120

140160

180

200

2005 2006 2007 2008 2009

Mean

Mean


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Year Mean

y

(base year-

current year)

x

xy x2

2005 100 -2 -200 4

2006 120.66 -1 -120.66 1

2007 133.53 0 0 0

2008 182.14 1 182.14 1

2009 116.15 2 232.3 4

y = 652.48 x = 0 xy = 93.78 x2=10

TABLE IX (trend equation)

Base year is 2007

y = a + b x

a = 652.48/ 5 = 130.49

b = 93.78 / 10 = 9.37

Therefore,

y = 130.49 + 9.37 x

If the x is 2010


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Where as

x = current year base year

= 2010 2007

= 3

x = 3

Therefore,

y = 130.49 + 9.37 x

= 130.49 + 9.37 (3)

= 130.49 + 28.11

= 158.6

y = 158.6

By substituting the next years by using the same equation we can estimate the crude oil

price for the consequent years

Mean and standard deviation

Year Mean of crude oil Standard deviation

2005 100 11.58912

2006 120.66 9.808127

2007 133.53 22.5111

2008 182.14 54.38327

2009 116.15 24.44282


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TABLE X (mean and standard deviation)

Trend for the next five years

YEAR TREND

2010* 158.6

2011* 169.97

2012* 177.34

2013* 186.71

2014* 196.08

Note: projections

TABLE XI (trend for the next 5 years)

100

120.66

133.53

182.14

116.15

158.6169.97

177.34186.71

196.08

2005 2006 2007 2008 2009 2010* 2011* 2012* 2013* 2014*

Trend

Trend


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GRAPH VIII (trend of the crude oil Price in $ for the next 5 years)

OBSERVATION

In the above graph the the price of crude oil is expected to be at 196.08 $ per barrel

CONCLUSION

The price of crude oil is drastically increasing from year to year where as the price in the

Indian market not increasing such as the international crude oil is cost due to the presence of

government hand in the oil companys in India as due

If the presence of government is not there now the price will be very high in India. Now aday the price is also increased due to high increase in the crude oil and the oil refinery companies

are running under loss that is the main reason to increase in price of petroleum products in India.

The consumption of petroleum products also increase due to the increase in vehicles and usage in

different manner.

As India has joined in Copenhagen summit to reduce the carbon emission by 2012 in

order to control the carbon emission in Delhi the major vehicles are using LPG.

REFERENCES

Study on Oil Price Impact ^ May-17


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Report of The Expert Group on A Viable and Sustainable System of Pricing of PetroleumProducts^Government of India New Delhi^02 February 2010

www.iocl.com

www.bharatpetroleum.com/

www.hindustanpetroleum.com

www.reliancepetroleum.com/

http://www.indexmundi.com/commodities/?commodity=petroleum-price-index&months=60

www.Essar.com

Petroleum Resources under Petroleum in ECT2nd ed., Vol. 14, 856867, by E. R.Heydinger, Marathon Oil Co.;Resources under Petroleum in ECT3rd ed., Vol. 17, pp. 132142, by L. J. Drew, U.S.

Geological Survey.

http://www.google.com/

en.wikipedia.org/wiki/Wikipedia

www.wikipedia.org

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