Transcript PETROLEUM SECTOR - ~ Welcome to CMII.ICAI.ORG

PETROLEUM
SECTORAn over view.
01/08/11
CA.M RaviBalasubrahmanyam, DMA(ICA)
1
CHAPTER INDEX
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OVERVIEW OF INDUSTRY
EXPLORATION AND PRODUCTION(E & P)-UPSTREAM
REFINING-DOWNSTREAM
MARKETING AND DISTRIBUTION-DOWNSRTEAM
PRICING ASPECTS
ALTERNATIVE FUELS
CONSERVATION OF PRODUCTS
OIL AND GAS SECURITY-STRATEGIC STORAGE/
RESERVES
POLLUTION
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CA.M RaviBalasubrahmanyam, DMA(ICA)
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OVERVIEW

PLAYS A VITAL ROLE IN THE ECONOMIC GROWTH

OCCUPIES A MAJOR SHARE IN TOTAL ENERGY
MIX- 38 %.

ENERGY MIX – OIL, GAS, COAL, HYDROELECTRIC,
NUCLEAR, AND RENEWABLE (SOLAR, WIND AND
BIOMASS).

CONSUMPTION DURING 09-10 – 137.808 MMT
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CONSUMPTION DURING 10-11 – 141.785 MMT
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CRUDE OIL / GAS – MAJOR INPUT FOR
PETROLEUM PRODUCTS / PETRO CHEMICALS
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CA.M RaviBalasubrahmanyam, DMA(ICA)
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OVERVIEW-Contd…

CONSIST OF TWO MAJOR ACTIVITIES – UPSTREAM AND
DOWNSTREAM

UPSTREAM – EXPLORATION AND PRODUCTION OF CRUDE OIL
AND GAS
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DOWNSTREAM – REFINING OF CRUDE OIL INTO VARIOUS
PRODUCTS AND MARKETING OF THESE PRODUCTS
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80% OF CRUDE OIL DEMAND MET THROUGH IMPORTS AND
BALANCE 20% BY INDIGENOUS PRODUCTION
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TOTAL SALES VALUE 09-10 - 885064 CRORES
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TOTAL SALES VALUE 10-11 - 1000024 CRORES
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CONTRIBUTION TO GOVT. REVENUE -09-10- 183861 CRORES
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CONTRIBUTION TO GOVT. REVENUE -10-11- 225494 CRORES.
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CA.M RaviBalasubrahmanyam, DMA(ICA)
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OVERVIEW-Contd….

CONTRIBUTION TOWARDS STATE TAXES -09-1039.21 %

CONTRIBUTION TOWARDS CENTRAL TAXES -09-10–
60.79 %
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CONTRIBUTION TOWARDS STATE TAXES -10-11 –
39.47 %
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CONTRIBUTION TOWARDS CENTRAL TAXES -10-11–
60.53 %
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DOMINATED BY PUBLIC SECTOR
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PRICING OF THE PRODUCTS UNDER APM SCENARIO
UPTO 31.03.2002 FOR MS,HSD,SKO(D) & LPG(D)
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PRICING OF THE PRODUCTS UNDER MDPM SCENARIO
FROM 01.04.2002 FOR MS,HSD,SKO(D) & LPG(D)
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CROSS SUBSIDIZATION OF PRODUCT
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CA.M RaviBalasubrahmanyam, DMA(ICA)
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OVERVIEW
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UNDER RECOVERIES- 09-10- ON SALE OF PETROL 5151 CR,
DIESEL 9279 CR, SKO(PDS) 17364 CR, LPG(D) 14257 CR TOTAL 46051 CR
UNDER RECOVERIES- 10-11- ON SALE OF PETROL 2227 CR,
DIESEL 34706 CR, SKO(PDS) 21772 CR, LPG(D) 19485 CR TOTAL 78190 CR
SUBSIDY ON LPG(DOM) PER CYLINDER SOLD FOR FY 09-10 – U/R
TO OIL Cos.- 178.13, FISCAL BUDGET SUBSIDY- 22.58. TOTAL 200.71.
SUBSIDY ON LPG(DOM) PER CYLINDER SOLD FOR FY 10-11 – U/R
TO OIL Cos.- 249.94, FISCAL BUDGET SUBSIDY- 22.58. TOTAL 272.52.
SUBSIDY ON SKO(PDS) PER LTR SOLD FOR FY 09-10 – U/R TO
OIL Cos.- 14.85, FISCAL BUDGET SUBSIDY- 0.82. TOTAL -15.67.
SUBSIDY ON SKO(PDS) PER LTR SOLD FOR FY 10-11 – U/R TO
OIL Cos.- 17.39, FISCAL BUDGET SUBSIDY- 0.82. TOTAL -18.21.
01/08/11
CA.M RaviBalasubrahmanyam, DMA(ICA)
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PRICE COMPARISON WITH NEIGHBORING
COUNTRIES – JULY’11- PER LTR
PRODUCT
DELHI
KARACHI
DHAKA
COLOMBO
KATHMANDU
PETROL
63.70
41.93
45.53
50.75
63.79
DIESEL
41.29
47.59
27.57
34.69
42.70
SKO(PDS)
14.83
43.59
27.57
24.91
42.70
LPG(D)
399.00
606.28
473.66
871.53
827.32
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CA.M RaviBalasubrahmanyam, DMA(ICA)
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Comparison of prices with Developed countries.- /Ltr
as on Jun’2010
Country
Petrol –
Total price
Petrol – Ex
Tax price
Diesel –
Total price
Diesel – Ex
Tax price
India(DEL)
51.68
26.54
37.71
26.54
USA
33.52
28.40
36.32
30.73
Canada
44.23
30.26
42.84
31.66
Japan
70.31
38.64
59.60
40.04
UK
80.08
29.33
69.37
30.73
Spain
65.65
32.13
52.61
33.52
Italy
77.29
32.59
57.73
33.99
80.08
30.73
58.20
31.66
75.89
29.33
54.48
30.26
Germany
France
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CA.M RaviBalasubrahmanyam, DMA(ICA)
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Industry structure
I ndus tr y Str uc tur e
E x p lo ra tio n
&
P ro du ctio n
Na tu ra l Ga s & Pip elin es
Refin in g & Ma rk etin g
Refin in g & Ma rk etin g
Pu b lic S ecto r
Ga s Distrib u tio n
• ONGC
• GAIL
• OIL
LNG
P riv a te S ecto r
(Relia n ce,
HOE C, S h ell,
B G, Ca irn etc. )
• Pro jects (S h ell
Petro n et LNG,
BG, IOC etc. )
Pip elin es
• IOCL
• BPCL
• HPCL
• Petro n et In d ia
• GAIL
Pu b lic secto r
. ONGC
• IOCL
•
•
•
•
•
•
•
•
HPCL
BPCL
IBP $
MRPL* * *
NRL* *
CPCL*
BRPL $
KRL #
Exiv
clu
ers
Pr
a siv
te SeecRe
to fin
r
Pu
blia
licnse
•
Re
cc
etio r
• Essa r
• CPCL*
• S h ell @
•
KRL* *
• BRPL *
• NRL* *
* Majority stake acquired by IOCL
** Majority stake acquired by BPCL
*** Majority stake acquired by ONGC
@ Exclusive Marketing Company
$ Merged with IOCL
# Fully merged with BPCL
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CA.M RaviBalasubrahmanyam, DMA(ICA)
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EXPLORATION AND PRODUCTION-UPSTREAM
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REFERS TO EXPLORATION AND PRODUCTION (E&P)
OF CRUDE OIL AND GAS
E&P- BY UNDERTAKING GEOLOGICAL / GEOPHYSICAL
SURVEYS ON WATER AND LAND
CRUDE OIL / GAS PRODUCED ON OFF / ON SHORE
AREAS
OFF SHORE REFERS TO E&P UNDER WATER
ON SHORE REFERS TO E&P ON LAND
ONLY 20% OF TOTAL DEMAND MET THRU INDIGENOUS
PRODUCTION
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CA.M RaviBalasubrahmanyam, DMA(ICA)
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OFF SHORE DRILLING
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CA.M RaviBalasubrahmanyam, DMA(ICA)
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ON SHORE DRILLING
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UPSTREAM –contd.
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SULPHUR CONTENT DETERMINES THE TYPE OF CRUDE
TYPE OF CRUDE- SWEET, SOUR AND HEAVY
TRANSPORTATION TO REFINERIES BY –COASTAL TANKERS,
BARGES,PIPELINES,RAILWAGON, TANK LORRY
TOTAL COST INCURRED FOR E&P IS THE COST OF THE CRUDE
PROFIT = REALIZABLE VALUE OF CRUDE MINUS COST OF CRUDE
Indigenous Crude production-09-10- 33.69 MMT
Indigenous Crude production-10-11- 37.712 MMT
Indigenous Natural Gas production-09-10- 47.50 BCM
Indigenous Natural gas production -10-11- 52.22 BCM
Imported Crude 09-10 – 159.259 MMT
Imported Crude 10-11 - 163.594 MMT
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CA.M RaviBalasubrahmanyam, DMA(ICA)
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PROJECTED PRODUCTION OF CRUDE OIL AND NATURAL
GAS-DURING THE ELEVENTH PLAN -2007-12
PRODUCTION OF Crude oil (MMT)
COMPANY
07-08
08-09
09-10
10-11 11-12
TOTAL
ONGC
27.16
28.00
29.00
28.53 27.37
140.06
OIL
3.50
3.55
3.73
3.91
4.30
18.99
8.75
7.85
47.71
JOINT VENT./
PRIVATE Cos. 10.57
10.78
9.76
TOTAL
41.23
42.33
42.49
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CA.M RaviBalasubrahmanyam, DMA(ICA)
41.19 39.52
206.76
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REFINING-DOWNSTREAM
A.
REFINING
i.
PRODUCTION OF FINISHED PRODUCTS FROM
CRUDE OIL HAVING DIFFERENT BOILING POINTS
BY A PROCESS OF FRACTIONATING/DISTILLATION
ii.
TO MEET OISD / EXPLOSSIVE / POLLUTION
CONTROL / QUALITY CONTROL NORMS FOR
INFRASTRUCTURE
iii.
TYPE OF CRUDE USED DETERMINES
INFRASRTUCTURE FOR REFINERY/ PRODUCTION
OF FINISHED PRODUCT
iv.
PRODUCT TYPE – LIGHT, MIDDLE AND HEAVY
DISTILLATES
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CA.M RaviBalasubrahmanyam, DMA(ICA)
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REFINING-DOWNSTREAM
A.
REFINING – (contd....)
v.
LIGHT DISTILLATES – LPG,NAPTHA,PETROL ETC
vi.
MIDDLE DISTILLATES –HSD,SKO,ATF,LDO ETC
vii.
HEAVY DISTILLATES- LUBES,LSHS/FO, LUBE BASE OIL,
BITUMEN,COKE ETC.
viii.
CONSUMPTION FY 09-10– LIGHT DISTILLATES 26.18%,MIDDLE-51.16% AND HEAVY-22.66%
ix.
CONSUMPTION FY 10-11– LIGHT DISTILLATES 27.66%,MIDDLE-52.51 % AND HEAVY-19.83%
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CA.M Ravi Balasubrahmanyam, DMA(ICA)
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REFINING-DOWNSTREAM –CONTD…
A.
PETROLEUM PRODUCTS AND THEIR USAGE
a.
Liquefied Petroleum gas is used as Domestic fuel. Also
for Industrial application where technically essential. Now
permitted as Auto fuel.
b.
Naphtha/NGL is used as Feedstock/Fuel in Fertilizer units,
feedstock for petrochemical sector and fuel for Power
plants.
c.
Gasoline or Petrol is used as a fuel in motor cars,
scooters, motor cycles, and other light vehicles.
d.
Kerosene oil is used as household oil (cooking/lighting).
A special grade of kerosene oil known as Aviation
Turbine fuel used as fuel in aero planes.
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REFINING-DOWNSTREAM –CONTD…
A.
PETROLEUM PRODUCTS AND THEIR USAGE (Contd..)
e.Diesel oil (HSD) is used as a fuel for transport sector
(Railways/Road),agriculture(tractors,pumpsets,thres
hers etc.) and Captive power generation.
f. LDO (Light Diesel oil) used as fuel for agricultural
pump sets, small industrial units, start up fuel for
Power generation.
g.Furnace oil/LSHS is used as Secondary fuel for
Thermal Power Plants, Fuel/feedstock for fertilizer
plants. Industrial units.
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CA.M RaviBalasubrahmanyam, DMA(ICA)
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REFINING-DOWNSTREAM –CONTD…
A.
PETROLEUM PRODUCTS AND THEIR USAGE (Contd..)
h.Lubricating Oil is used as lubrication for
Automotive/Industrial application.
i.Paraffin Wax is used for making candles,vaseline,Ointments
and wax paper.
j.Mineral Turpentine Oil used as solvent for textile printing,
dry cleaning, polish and insecticides
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CA.M RaviBalasubrahmanyam, DMA(ICA)
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REFINING-DOWNSTREAM –CONTD…
A.
PETROLEUM PRODUCTS AND THEIR USAGE (Contd..)
k.Grease is a semisolid product of dispersion of
thickening agent in liquid lubricant.
l.Asphalt/Bitumen is a black sticky substance
used for making road surfaces and the final
residue of petroleum
m.Bezene/Toluene/LABFS/CBFS used
Feedstock for value added products.
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Oil Refinery at Dusk
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CA.M RaviBalasubrahmanyam, DMA(ICA)
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PROCESS OF REFINING
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REFINING-DOWNSTREAM –CONTD…
PRODUCT TRANSPORTATION BY :
COASTAL TANKER, BARGES, PIPELINES,RAIL WAGON AND TANK
TRUCK
REFINING CAPACITY- 1-4-10 :
PSU (IOC,BPC,HPC,ONGC) -112.90 MMT
PRIVATE(RELIANCE/ESSAR)-72.50 MMT
REFINING CAPACITY- 1-4-11 :
PSU (IOC,BPC,HPC,ONGC) -122.90 MMT
PRIVATE(RELIANCE/ESSAR)-70.50 MMT
NO. OF REFINERIES :- PSU 18, PRIVATE-3
CRUDE PROCESSED FY -09-10- 186.562 MMT
(PSU- 112.327, PRIVATE- 74.436)
CRUDE PROCESSED FY -10-11-196.485 MMT
(PSU- 115.109, PRIVATE- 81.376)
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CA.M RaviBalasubrahmanyam, DMA(ICA)
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REFINING-DOWNSTREAM –CONTD…
REFINING COST :
COST OF CRUDE OIL, CHEMICALS / CATALYST,
CONSUMABLES, WATER AND POWER,
SALARIES AND WAGES, OVERHEADS,
REPAIRS AND MAINTENANCE, DEPRECIATION,
INTEREST COST ON WORKING CAPITAL AND
NORMAL PRODUCTION LOSS
PROFIT – REFINERY TRANSFER / GATE PRICE OF
FINISHED PRODUCT MINUS REFINING COST
INCLUDING CRUDE COST
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MARKRTING AND DISTRIBUTIONDOWNSTREAM –CONTD…
B.
MARKETING
i.
MARKETING OF FINISHED PRODUCTS FROM
PRODUCTION CENTRES (REFINERIES) TO
CONSUMPTION CENTRES(INDIVIDUAL CUSTOMER/
INDUSTRIAL CONSUMER)
ii.
CONSIST OF STORAGE AND DISTRIBUTION
CENTRES ( INSTALLATION / TERMINAL / TAP OFF /
DEPOT), LPG BOTTLING PLANT, AIR FIELD
STATION (AFS), LUBEOIL BLENDING PLANT(LOBP),
RETAIL OUTLETS(RO), AND ADMINISTRATIVE
OFFICES
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Down-stream supply chain
Refinery
terminals
Inland / Tap
Off Terminals
Depots
Port
Terminals
Customers
01/08/11
Retail Outlets
CA.M RaviBalasubrahmanyam, DMA(ICA)
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Oil Storage Facility
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LPG BOTTLING PLANT
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CA.M RaviBalasubrahmanyam, DMA(ICA)
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MARKETING AND DISTRIBUTION-DOWNSTREAM –
CONTD…
iii. INFRASTRUCTURE AT DISTRIBUTION CENTERS,
LPG BOTTLING PLANT,LOBP,AFS,RO SHOULD
CONFORM TO OISD, EXPLOSIVE, POLLUTION
CONTROL AND QUALITY CONTROL NORMS
iv.
PRODUCT TRANSPORTATION BY -COASTAL
TANKERS, BARGES,PIPELINES,RAILWAGON, TANK
TRUCK
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MARKETING AND DISTRIBUTIONDOWNSTREAM –CONTD…
v.
vi.
vii.
viii.
MARKET SHARE-09-10- PSU – 89.10%,PRIVATE10.90%
MARKET SHARE-10-11- PSU – 91.07%,PRIVATE8.93%
MARKETING COST- COST INCURRED FOR –
STORAGE & DISTRIBUTION CENTERS , LPG
BOTTLING PLANT , LOBP, AFS,RO’S AND
ADMINISTRATIVE OFFICES
NET PROFIT = SALES PRICE OF PRODUCTS MINUS
MARKETING COST (INCLUDING PURCHASE COST
OF PRODUCTS)
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MARKETING AND DISTRIBUTION-DOWNSTREAM –
CONTD…
ix. Memorandum of Collaboration (MOC) between the oil
companies for sharing product and facilities to
optimize effective utilization of product and facilities
x. Monthly industrial logistic plan meeting (ILP) for
finalizing product movement and distribution pattern
for ensuing month on the basis of refinery
production, product availability, consumption and
demand
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CA.M RaviBalasubrahmanyam, DMA(ICA)
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MARKETING AND DISTRIBUTION-DOWNSTREAM –
CONTD…
xi. Industry Coordination – Regional level coordinator
(RLC) , State level coordinator (SLC) and District level
coordinator (DLC)
RLC- Developing an industry approach to any
difficulties / problems encountered by the
industry
SLC- Reports to RLC. An intermediary between
Industry and the State Government with regard to
availability and distribution of products
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CA.M RaviBalasubrahmanyam, DMA(ICA)
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MARKETING AND DISTRIBUTION-DOWNSTREAM –
CONTD…
DLC- Report to SLC. To ensure coordination with district
authority with regard to distribution of products in the district
xii. Industry meeting for price fixation – To monitor / fixing prices
of retail products (MS / HSD / PDS KEROSENE/LPG(D)) in
respect of following
i.
Commissioning of new refinery
ii.
Commissioning of new installation / terminal
iii.
Commissioning of new pipelines
iv.
Commissioning of new depot / tap off point
v.
Commissioning of new retail outlet
vi.
Change in the RTKM of retail outlets
vii.
Revision in freight charges
viii.
Shifting of pricing points
ix.
Changes / imposition of statutory levies
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CA.M RaviBalasubrahmanyam, DMA(ICA)
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MARKETING AND DSTRIBUTION-DOWNSTREAM –
CONTD…
xiii. Types of Market –

“A” Class Market – Metros and other cities having
population over 10 lacs as per 1981 census
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“B” Class Market – Cities having population between 2
lacs to 10 lacs as per 1981 census
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“C” Class Market – All other towns / cities not covered
“A”, “B” and “E” markets excluding locations on
National / State Highways
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“D” Class Market – RO’s on National / State Highways
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“E” Class Market – Remote areas not covered by
National / State Highways and pockets of consumption
having no Retail Outlet within 10 Km radius
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CA.M RaviBalasubrahmanyam, DMA(ICA)
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MARKETING AND DISTRIBUTION-DOWNSTREAM –
CONTD…
xiv. Types of Marketing Channels –
Retail
MS / HSD / Lubricants and Greases through Retail Outlets
(RO’s)

A site RO – Company owned facilities and company
controlled or dealer controlled
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B site RO – Dealer owned facilities and dealer controlled

Agency for Kerosene / LDO , Lubricants / Greases –
Direct Consumer pumps for HSD
a.
01/08/11
Direct Customers for HSD , FO , LDO , LSHS , NAPTHA,
LPG , BITUMEN, BASE OIL , LUBRICANT AND GREASES,
ATF ETC
CA.M RaviBalasubrahmanyam, DMA(ICA)
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MARKETING AND DISTRIBUTION-DOWNSTREAM –
CONTD…
xv.
QUALITY CONTROL(QC) – PRODUCT QUALITY AND
SPECIFICATION SHOULD BE AS PER INDUSTRY QUALITY
CONTROL MANUAL (IQCM)
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Responsibility of ensuring proper quality control
is that of each marketing company

To set up QC LABS having basic testing facilities
as per IQCM at each storage and distribution
point (Installation / Terminal , Tap Off point and
Depots)
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To set up mobile QC LABS for checking quality of
the product while in transit to Retail Outlet (RO’s)
and also at Retail Outlets
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CA.M RaviBalasubrahmanyam, DMA(ICA)
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MARKETING AND DISTRIBUTION-DOWNSTREAM –
CONTD…

Quality and Quantity (Q & Q) –Concept followed by
industry to ensure right quantity and right quality of the
product to the customer at the RO’s
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MS / HSD control order 1990For prevention of mal practice in supply and
distribution
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01/08/11
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Applicable to whole of India
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Mal practice includes adulteration, pilferage, stock
variation and unauthorized sale

Density of the product @ 150 C for MS / HSD at the
receiving end (RO) should be with in + / - 0.0030
variation in the density @ 150 C at the supply location
CA.M RaviBalasubrahmanyam, DMA(ICA)
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MARKETING AND DISTRIBUTION-DOWNSTREAM –
CONTD…
MS / HSD control order 1990- (Contd..)
01/08/11
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In case variation in density is beyond the
permissible limit the RO may be closed after
further quality verification
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Variation in stocks beyond the permissible limit
the RO will be liable to action under the control
order
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There are norms for marketing force of the
marketing company to do periodical
inspections at the RO’s to ensure Q & Q
CA.M RaviBalasubrahmanyam, DMA(ICA)
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PRICING

APM – (ADMINISTRATIVE PRICE MECHANISM)
 IT WAS INTRODUCED IN 1974

BASED ON “COST PLUS BASIS” PRINCIPLE

CENTRAL GOVT. PLAYS KEY ROLE IN DETERMINING
PRICES BY OPERATING INDUSTRY POOL ACCOUNTS

POOL ACCOUNTS TO FACILITATE STABILITY OF
PRICES IN VIEW OF FLUCTUATIONS IN CRUDE OIL
IMPORTS

FOR UPSTREAM – REIMBURSEMENT OF OPERATING
COST PLUS 15% POST TAX RETURN ON CAPITAL
EMPLOYED FOR INDIGENOUS CRUDE PRODUCTION
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PRICING –contd...

APM – (ADMINISTRATIVE PRICE MECHANISM)-Contd..

FOR DOWNSTREAM- REIMBURSEMENT OF OPERATING
COST PLUS 12% POST TAX RETURN ON NET WORTH AND
WEIGHTED COST OF BORROWINGS

CROSS SUBSIDIZATION OF PRODUCTS – KEEPING PRICES
OF THE PRODUCTS LIKE SKO AND LPG AT SUBSIDIZED
PRICES AND KEEPING PRICES OF OTHER PRODUCT LIKE
MS/HSD AND ATF AT HIGHER LEVEL
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CA.M RaviBalasubrahmanyam, DMA(ICA)
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PRICING-CONTD..

MDPM – (MARKET DETERMINED PRICE MECHANISM)

IT WAS INTRODUCED FOR REFINERIES ON 01.04.98
AND FOR MARKETING FROM 01.04.2002

BASED ON THE PRINCIPLE IMPORT PARITY PRICE
(IPP)/TRADE Parity from 16/06/06

IPP – LANDED COST OF FINISHED PRODUCTS LIKE MS
/HSD/ SKO/ LPG AT THE NEAREST PORT

THOUGH IN PRINCIPLE IT IS MDPM , HOWEVER
CENTRAL GOVT. HAS SAY IN DETERMINATION OF
FINAL RETAIL SELLING PRICE(RSP)
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PRICING-CONTD..

MDPM – (MARKET DETERMINED PRICE MECHANISM)

E&P ACTIVITY AND REFINERIES ARE BENEFITED

MARKETING ACTIVITY HAS BECOME LOSS MAKING
DUE TO NON REVISION OF RSP IN LINE WITH THE
IMPORT PARITY PRICE/Trade parity

MARGIN OF THE COMPANIES FLUCTUATE BASED ON
THE INTERNATIONAL OIL PRICES

CROSS SUBSIDIZATION OF PRODUCTS – KEEPING
PRICES OF THE PRODUCTS LIKE SKO AND LPG AT
SUBSIDIZED PRICES AND KEEPING PRICES OF OTHER
PRODUCT LIKE MS/HSD AND ATF AT HIGHER LEVEL
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Thrust Areas under MDPM
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





Productivity of Manpower/Machines
Cost control
Prudent investment decisions
Keeping Stock losses at minimum
Inventory control
Receivables control
No under recovery of statutory levies /freight
Keeping MIS data up to date
Close follow up of International Prices.
Foreign Exchange Management
01/08/11
CA.M RaviBalasubrahmanyam, DMA(ICA)
45
PRICING-CONTD..

MDPM – (MARKET DETERMINED PRICE MECHANISM)








Elements of selling price of MS / HSD
Ex. refinery gate price (IPP)-Import Parity
Price/Trade parity
Marketing cost / margin
Siding & shunting charges at MI (Main Installation)
Rail / Pipeline freight
Siding & Shunting charges at Depot
State Specific Cost
Excise duty
01/08/11
CA.M RaviBalasubrahmanyam, DMA(ICA)
46
PRICING-CONTD..


MDPM – (MARKET DETERMINED PRICE MECHANISM)
Elements of selling price of MS / HSD (Cont’d)
 FDZ delivery charges @ ` / kl
 Delivery charges beyond FDZ @ ps /kl/km
 Toll taxes
 Sales tax as applicable
 Dealers commission
 Total
 Rounding off differential
 Final retail selling price
01/08/11
CA.M RaviBalasubrahmanyam, DMA(ICA)
47
PRICING-CONTD..

MDPM – (MARKET DETERMINED PRICE MECHANISM)

Elements of selling price of SKO

Ex. Refinery gate price (IPP)-Import Parity
Price/trade parity
Marketing cost / margin
Siding & shunting charges at MI (Main
Installation)
Rail / pipeline freight
Siding & Shunting charges at Depot
State Specific Cost
Excise duty






01/08/11
CA.M RaviBalasubrahmanyam, DMA(ICA)
48
PRICING-CONTD..

MDPM – (MARKET DETERMINED PRICE
MECHANISM)









Elements of selling price of SKO
Toll taxes
Sales tax as applicable
Transportation costs
Wholesalers commission
Retailers commission
Total
Rounding off differential
Final retail selling price.
01/08/11
CA.M RaviBalasubrahmanyam, DMA(ICA)
49
PRICING-CONTD..

MDPM – (MARKET DETERMINED PRICE
MECHANISM)

Elements of selling price of other products

Ex. Refinery gate price (IPP)-Import parity Price
/Trade parity
Marketing Cost /margin
Siding & shunting charges at MI
Rail / Pipeline freight



01/08/11
CA.M RaviBalasubrahmanyam, DMA(ICA)
50
PRICING-CONTD..

MDPM – (MARKET DETERMINED PRICE
MECHANISM)






Elements of selling price of other products
Siding & Shunting charges at Depot
State Specific Cost
Excise duty
Local levies and Sales Tax
Final selling prices
01/08/11
CA.M RaviBalasubrahmanyam, DMA(ICA)
51
PRICE BUILT UP BREAK UP IN PERCENTAGE
PRODUCT
as on 01/07/11
MS
STATE
EXCISE
SALESTAX
BASIC+OTHER
CHENNAI
21.89%
20.78%
57.33%
BANGALORE
20.79%
23.40%
55.81%
TRIVDRM
22.42%
20.82%
56.76%
HYDERABAD
20.92%
24.38%
54.70%
CHENNAI
4.69%
17.29%
78.02%
BANGALORE
4.46%
18.91%
76.63%
TRIVDRM
4.62%
18.21%
77.17%
HYDERABAD
4.57%
17.83%
77.60%
PRODUCT
01/08/11
HSD
CA.M RaviBalasubrahmanyam, DMA(ICA)
52
PRICE BUILT UP BREAK UP IN RS/ LITRE AS ON 01/07/11
PRODUCT
STATE
(Amount )
MS
EXCISE
SALESTAX
BASIC+OTHERS
/ Ltr
CHENNAI
14.78
14.03
38.69
67.50
BANGLR
14.78
16.64
39.68
71.10
TRIDRM
14.78
13.72
37.41
65.91
HYDBAD
14.78
17.22
38.64
70.64
PRODUCT
HSD
CHENNAI
2.06
7.60
34.29
43.95
BANGLR
2.06
8.74
35.41
46.21
TRIDRM
2.06
8.11
34.37
44.54
HYDBAD
2.06
8.04
34.98
45.08
01/08/11
CA.M RaviBalasubrahmanyam, DMA(ICA)
53
RSP METRO WISE – PETROL/LTR
PLACE
01.05.11
01.06.11
01.07.11
61.94
61.94
67.21
67.49
KOLKATA
58.38
62.52
58.38
62.52
63.36
67.70
63.69
68.00
MUMBAI
63.10
63.10
68.32
68.61
CHENNAI
01.04.11
DELHI
01/08/11
CA.M RaviBalasubrahmanyam, DMA(ICA)
54
RSP STATE CAPITAL(SOUTH) WISE
–
/LTR-MS
PLACE
01.04.11
01.05.11
01.06.11
01.0711
CHENNAI
61.94
61.94
67.21
67.49
BANGALORE
65.64
65.64
71.09
71.37
HYDERABAD
65.17
65.17
70.68
70.94
TRIVANDRUM
61.76
61.76
65.90
66.19
PONDY
56.63
56.63
61.50
61.82
01/08/11
CA.M RaviBalasubrahmanyam, DMA(ICA)
55
RSP METRO WISE -HSD
(/ LTR)PLACE
CHENNAI
01.04.11
1.05.11
01.06.11
01.07.11
40.16
40.16
40.16
43.95
KOLKATA
37.75
40.06
37.75
40.06
37.75
40.06
41.29
43.74
MUMBAI
42.06
42.06
42.06
45.99
DELHI
01/08/11
CA.M RaviBalasubrahmanyam, DMA(ICA)
56
RSP STATE CAPITAL(SOUTH) WISE
(/ LTR)- HSD
PLACE
01.04.11
1.05.11
1.06.11
01.07.11
CHENNAI
40.16
40.16
40.16
43.95
BANGALORE
42.34
42.34
42.34
46.21
HYDERABAD
41.33
41.33
41.33
45.11
TRIVANDRUM
41.39
41.39
41.39
44.55
PONDY
38.98
38.98
38.98
42.65
01/08/11
CA.M RaviBalasubrahmanyam, DMA(ICA)
57
ALTERNATIVE FUELS

CNG (Compressed Natural Gas):
IN ORDER TO REDUCE POLLUTION AND
RECENT FINDING OF GAS RESERVES THIS
BEING VIEWED AS ALTERNATIVE FUEL FOR
VEHICLES

AUTO LPG:
IN ORDER TO REDUCE POLLUTION AND COST
EFFECTIVE THIS BEING VIEWED AS
ALTERNATIVE FUEL FOR VEHICLES
01/08/11
CA.M RaviBalasubrahmanyam, DMA(ICA)
58
ALTERNATIVE FUELS/ENERGY SOURCES







Ethenol – In order to reduce pollution and effect on crude import bill this
being viewed as alternative fuel for vehicles for blending with MS.
Bio-diesel (Non edible Oil Seeds) : Jatropha,Karanja, Pongamia. Etc)In order to reduce pollution and effect on crude import bill this being
viewed as alternative fuel for vehicles for blending with HSD.
Coal Bed Methane(CBM) – is a Natural Gas (Methane) absorbed in
Coal and lignite seams. Coal is the both the source and reservoir rock
for CBM.
Gas from Gas Hydrates-Gas hydrates are basically Methane molecules
trapped in ice.
Gas from Coal gasification-Gas is produced by gasifying the coal by
injecting oxidants.
Conversion of Coal to Liquid hydrocarbon by process of Coal
Liquefaction.
Oil from Oil shale- Oil Shale is an organic material mainly called
Kerogen which can be converted into a substance similar to petroleum.
01/08/11
CA.M RaviBalasubrahmanyam, DMA(ICA)
59
CONSERVATION







Means better and more efficient use resulting in attainment of
higher energy use efficiencies, minimization of wasteful
practices and wastage and protection of the environment.
The need to reduce ever increasing gap between demand for
and supply of Crude oil and Petroleum products.
The need of the hour is to conserve petroleum by its judicious
use, substituting by it by other resources wherever feasible
and restricting its use only to the essential needs.
Joint responsibility of Industry, Individuals, Organizations, Oil
companies and Government.
Steps to promote conservation in Transport, Industrial,
Agricultural and Domestic secto
Activities are promoted and coordinated by PCRA/Oil
companies under the guidance and supervision of MOPNG.
Every year Jan 16-Jan 31 is observed as Oil conservation
Fortnight.
01/08/11
CA.M RaviBalasubrahmanyam, DMA(ICA)
60
OIL AND GAS SECURITY-STRATEGIC
STORAGE/RESERVES

Facilitating increase in domestic oil and gas
production under NELP,acquiring oil and gas
acreages abroad, facilitating LNG imports, taking
initiative to import gas through transnational
pipelines, diversifying crude oil supply sources,
taking steps to build strategic crude oil storage and
focus on alternative sources of energy..
01/08/11
CA.M RaviBalasubrahmanyam, DMA(ICA)
61
POLLUTION/EMISSION STANDARDS








Petrol, Diesel burned as fuel gives off pollutants –carbon monoxide,
nitrogen oxides, particulate matter and unburned hydrocarbons-to form Air
pollution.
Emission Standards set specific limits to the amount of pollutants that can
be released into the Environment.
Strict fuel quality norms are set to minimize the emission from burning of
Petrol and Diesel.
Unleaded Petrol and Low Sulphur Diesel are made available to reduce the
pollution.
Emission norms for Cars,LCV, Buses and Heavy trucks are based on
European model i.e. EURO I,II,III and IV.
Emission norms for 2/3 wheelers are based on Indian norms i.e. Bharath
Stage I,II and III.
Quality of Petrol and Diesel should meet the Specifications of Emission
norms for 4 or more than 4 wheelers and 2/3 wheeler
BS IV auto fuels have been introduced in 13 major cities from 01/04/10. For
the rest of country BS III fuels would be introduced by 1/10/10
01/08/11
CA.M RaviBalasubrahmanyam, DMA(ICA)
62
THANK YOU
01/08/11
CA.M RaviBalasubrahmanyam, DMA(ICA)
63