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Political factors

Pre-independence period: The Petroleum

Act
Post independent period:

Early phase (1947

to 1969)
Development phase (1970 to 1989)
Economic liberalization phase of
1990s

Delicensing of refining sector from 1998
The Hydrocarbons Vision 2025

labour law. tariffs. trade restrictions.Explaination start Political factors: refer to influence of a political entity such as government’s policies. and political stability. . Includes areas such as tax policy. i. politician’s interests. how and to what degree a government intervenes. and the ideologies of several political parties on the industry. environmental law.e. goods and services which the government wants to provide.

refining and blending of petroleum was already in place since 1934. The Petroleum Act to control issues relating to import.  Development phase (1970 to 1989). storage. Indian petroleum industry in the post independent period it may be divided into three distinct phases:  Early phase (1947 to 1969).in this period the US companies played dominant role replacing the Soviets and  Economic liberalisation phase of 1990s. .when the government consolidated its control over the industry with Soviet assistance. transport. production.In the pre-independence period.

1954. announced that petroleum would be the core sector industry.Explaination: post independence the Government of India. all future development of petroleum industry was reserved for public sector . Thus. petroleum exploration & production activity was controlled by the government. In pursuance of the Industrial Policy Resolution. under the Industrial Policy Resolution of 1954.owned National Oil Companies (NOCs). namely Oil & Natural Gas Corporation (ONGC) and Oil India Private Ltd (OIL).

4. Collaborate with a small country like Rumania 3. Try and develop the industry through self-help by employing technicians and bringing necessary machinery from which ever source available. Explore the possibility of a government to government cooperation with other small but neutral countries like Austria which had developed sufficient technical expertise in petroleum industry by that time. the government went for the first alternative. 2. . Seek assistance of a great power like Soviet Union. for the development of its petroleum industry: 1.Thodi bakwaas There were four options with govt.

Thodi bakwaas US companies and multilateral funding agencies like World Bank replaced soviets In the early seventies. the government of India nationalised the refinery and marketing facilities of three foreign oil companies. But the government did not accept Burmah-Shells' proposal. Out of those three Burmah -Shell. the British company desperately tried to stay in India even as junior partner to a joint venture with a national oil company.namely Caltex and Standard Vaccum were themselves eager to leave the country due to their internal organisational restructuring and domestic compulsions. . The other two American companies .

.To overcome the severe balance of payment crisis of 1991. the government of India took resort to the International Monetary Fund (IMF) and the World Bank prescriptions to bail out its ailing economy. liberalisation in the mid-nineties: greater access to the refinery sector for private companies and a green light for joint ventures with state-run enterprises/public sector refining company.

Gujarat. This will have adverse effect on the operating cost of public sector refineries should international crude price falls below the domestic crude price. the refining sector has been delicensed. Reliance Industries Ltd. private and joint sector refineries have been permitted to import crude oil freely without import license for actual use in their own refineries.  from 1998. .Later. (RIL) was allowed to build on their own the largest refinery in the country and became the second largest player in oil refining sector with 27 MMTPA state of the art refineries at Jamnagar.

The India Hydrocarbon Vision 2025 report estimates future refinery demand at 368 million tons by 2025. a study whose recommendations may become official policy. Issues such as E&P. the government released in early 2000 Hydrocarbon Vision 2025. . among other things. refining. oil security. tariff and pricing. The Hydrocarbons Vision 2025 lays down the framework which would guide the policies relating to the hydrocarbons sector for the next 25 years. The study suggests. marketing. external policy. that India revise foreign ownership regulations for refinery operations to allow 100% foreign ownership. and restructuring and disinvestment are addressed.To address the absence of a policy.

refining and blending of petroleum was already in place since 1934. production. tariff and pricing. external policy. storage. • Further. the Oil Fields (Regulation and Development) Act. transport. refining. 1959 provided regulatory framework for domestic exploration and production of Oil & Gas. Issues such as E&P. and restructuring and disinvestment are addressed.POLICIES AND REGULATIONS • The Petroleum Act to control issues relating to import. . 1948 and the Petroleum and Natural Gas Rules. marketing. oil security. Hydrocarbon Vision • The Hydrocarbons Vision 2025 lays down the framework which would guide the policies relating to the hydrocarbons sector for the next 25 years.