India’s petroleum industry plays a pivotal role in the country’s economic landscape, contributing significantly to its energy security and socio-economic development. This sector encompasses a broad range of activities, including exploration, production, refining, distribution, and marketing of petroleum and its by-products. From upstream activities such as crude oil and natural gas extraction to downstream processes involving the refining of fuels like petrol, diesel, LPG, and kerosene, the petroleum industry forms the backbone of India’s energy infrastructure.
The Indian petroleum industry is divided into three key sectors: upstream, midstream, and downstream.
India has seen a remarkable increase in refining capacity. In April 2014, the refining capacity stood at 215.066 Million Metric Tons Per Annum (MMTPA), which has grown to 256.816 MMTPA by April 2024. This increase is driven by both state-owned and private refineries, with private players such as Reliance Industries playing an essential role in making India a significant global refining centre.
The roots of India’s petroleum industry date back to 1867 when the first oil well was drilled in Digboi, Assam. This led to the formation of the Indian Oil Corporation in 1959, which set the stage for refining and distribution on a large scale. Over the decades, the industry expanded with significant milestones, including the development of world-class refineries such as the Jamnagar refinery by Reliance Industries in Gujarat, which remains one of the largest single-location refineries in the world.
The Indian government has been active in fostering growth in the petroleum sector. Several initiatives have been launched to boost exploration, improve refining capacities, and enhance energy security:
India’s petroleum industry is also a key player in the global energy market. The country’s refining capacity exceeding 250 MMTPA has enabled it to cater to growing international demand. Major export destinations include South Asia, Africa, and Europe. The government’s emphasis on export-oriented growth, along with Special Economic Zones (SEZs) for refineries, has boosted India’s position as a global petroleum exporter.
India’s petroleum industry is supported by a wide array of stocks, with both public and private sector companies playing significant roles. Below are a few prominent stocks:
India’s petroleum industry is expected to witness continued growth, driven by rising demand for energy and the government’s focus on improving infrastructure and energy security. The target refining capacity for 2030 is 309.5 MMTPA, and the aim for exploration acreage has been set at 1 million square kilometres by 2030.
Additionally, for the development of green hydrogen production, the target is 5 MMTPA by 2030.
India’s petroleum industry continues to evolve, with significant investment in exploration, refining, and distribution. Government initiatives and foreign trade have contributed to making India a global player in petroleum exports. As the country looks to meet its growing energy needs and transition to greener sources of energy, India’s petroleum sector remains a key pillar of its economic and energy strategy.
Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.
Investments in the securities market are subject to market risks, read all the related documents carefully before investing.
Published on: Jan 29, 2025, 2:04 PM IST
Nikitha Devi
Nikitha is a content creator with 6+ years of experience in the financial domain. Specialising in personal finance, investments, and market insights, Nikitha simplifies complex financial topics, making them accessible to readers.
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