Oil and Lubricant Industry

Oil and Lubricant Industry

Oil and Lubricant Industry

The lubricant industry in India is dominated by Indian State-owned/controlled oil companies such as Indian Oil Corporation Ltd (IOC), Bharat Petroleum Corporation Ltd (BPCL) and Hindustan Petroleum Corporation Ltd (HPCL) that account for almost half of the market share in India. Rest of the market share is occupied by multinational companies such as Shell, Exxon Mobil and others. Strong economic growth in India is creating potential for rapid growth in lubricant consumption. Increasing air pollution has forced the Government of India to tighten automobile emission limit and improve fuel quality. It leads to improvement in quality of lubricant and increased use of synthetic lubricant. The demand for automotive lubricant in India is driven by growth in vehicle production, whereas the demand for industrial lubricant is highly correlated with index of industrial production. The Indian Government has allowed 100 per cent foreign direct investment (FDI) in many segments of the sector, including natural gas, petroleum products, and refineries, among others. Backed by new oil fields, domestic oil output is anticipated to grow to 1 MBPD by financial year 2016. The State-owned Oil and Natural Gas Corporation (ONGC) dominates the upstream segment (exploration and production) accounting for more than 68 per cent of the country’s total oil output.