In recent weeks, crude prices have confronted a pressure that seems unending, falling to levels not seen in four years. The energy market, which had been relatively stable, even and predictable a few months ago, has been turned upside down by a combination of weakening consumption indicators, rising stockpiles, and geopolitical uncertainties that always seem to send markets reeling.
Trade War Fallout Erodes Demand Outlook
The present drop in oil demand is intimately linked to an upsurge in protectionist policies. The broad brush trade tariffs coming from the US administration, especially those aimed at China, have disrupted global trading patterns. Energetic growth is now much less likely than it was just a year ago, and we’ve seen the impact: larger importer countries are buying less energy. China’s story here is the most notable.
Economic indicators highlight how serious the problem has become. Consumer confidence in the US has sunk to its lowest level in almost five years, and the next batch of GDP data is expected to show a much slower rate of growth, if not an outright downturn. With global growth now faltering, energy markets around the world must deal with the aftermath of having held off too long in making policy decisions.
Rising Stockpiles Add to Market Anxiety
Simultaneously with weakening demand, an increase in oil inventories has additionally sobered market sentiment. According to estimates from the American Petroleum Institute, US commercial crude stockpiles rose by 3.8 million barrels during the past week. The increase was accompanied by a modest uptick at Cushing, Oklahoma, a key storage hub that often reflects broader market trends.
The increased supply has led to speculation that the Organization of the Petroleum Exporting Countries (OPEC) might respond by relaxing production limits even more. Analysts at JPMorgan Chase & Co. have put out the theory that OPEC might ramp up the supply even more when it gets together to have a meeting in not too long. If it does do that, the meeting could of course be interpreted as a market share maintenance meeting, but the result could be an even more oversupplied market.
Russia’s Output Rises Despite Sanctions
In the global supply situation, Russian oil exports have increased for two consecutive weeks. For the four weeks ending April 27, crude shipments from Russian ports went up to 3.26 million barrels per day. This is a 1% increase over the previous week, but it is particularly interesting that half of the tankers impacted by sanctions are now back to transporting Russian crude.
The revival of sanctioned ships highlights a slow but clear weakening of enforcement, letting Russia push back into international energy markets. The added flow from one of the world’s top producers could further hammer global prices if demand stays soft. As April comes to a close, the oil market confronts a perfect storm of dwindling demand, swelling inventories, and surging supply. A still-clouded outlook, courtesy of geopolitical tensions and economic uncertainty, does not lend itself to optimism for a near-term recovery. The next few weeks could well determine whether the current downturn will morph into something longer-term.
Brent and West Texas Intermediate (WTI) crude oil prices have fallen to their lowest in four years, with both dropping 16% in just a week. The drop was set off by China meting out a retaliatory 84% tariff on U.S. oil, just as the Trump administration was pushing its own aggressive 104% tariff hike. Brent now goes for USD 60.35 a barrel, while WTI hovers near USD 57.23 after a sharp midweek drop that saw it lose as much as 7%.
In the current context, the main challenges emerge from the following factors:
1. Mounting global risks (climate change, food insecurity, pandemics etc.) are not being sufficiently funded.
2. Debt vulnerability and restructuring are not being adequately addressed.
3. Global growth is increasingly dependent on the Bank’s scale.
4. Resource mobilization for transforming investment landscapes is not generating enough funds.
5. The private sector, often seen as a game changer, is nearly missing in action.
Global Demand Fears, Policy Uncertainty Compound Pressure
The market’s selloff is a direct consequence of the intensifying concerns about a downturn in worldwide growth and a softening demand for oil. Ever since Trump’s tariff announcement on April 2, the price of oil has dropped by almost 20 percent, its worst five-day slide since early 2022.
Goldman Sachs and Morgan Stanley analysts have reduced their 2025 oil forecasts, estimating that by year’s end the Brent price will be around USD 62 and WTI around USD 58. In fact, they see the oil market weakening further, into 2026 and beyond, as a plentiful global supply, coupled with some anticipated softness in demand, works to keep prices down.
MCX Crude at Key Technical Levels
As per the commodity analyst Gyan Ranjan Singh, the MCX crude oil broke a major support level around INR 4,975 and has formed a descending triangle, a bearish continuation pattern. Our Momentum indicators show RSI near 21 (deeply oversold), while the increased volume during the breakdown confirms bearish control.
The next crucial support level has been defined by Singh at INR 4,666, with near-term stability possibly being found around INR 4,800–4,870. Despite the dismal technicals, the formation of an oversold setup gives room for a tactical recovery scenario if confirmation signals come in.
Tactical Bullish Setups for Short-Term Traders
The oversold condition offers an opportunity for traders to take short-term bullish positions and bet on recovery. Traders might look for an entry point between 4,800 and 4,870, with a stop-loss set at 4,600. If we go back to when the stock was in the 5,380 to 5,535 range, that kind of target might be considered a reasonable upside.
Candlestick reversal patterns or RSI divergence should be waiting for swing traders to initiate positions. Yet volatility is what it is. Hence, we must manage risk. In swing trading, this can translate into using smaller position sizes and employing trailing stops in order to navigate the resistance zones the price attempts to rebound from.
The Oil and Gas Industry has been playing a vital role in the development of the Indian Economy as well as being a crucial sector among the eight core industries in India. Apart from the agricultural, Automobile, Chemical, and other major industry sectors, the oil & gas industry lobbying an impact on the Indian economy since its commencement.
Back in time, people considered petroleum, gas, oil, diamonds, gold, and other high-priced metals, as a source of income in trading them. Moreover, India stands as the 3rd Largest consumer of oil in the world and fourth place as the biggest refiner in the world.
The industry accomplishes every task that they have planned to do before the deadline, and ultimately became an on-demand energy industry globally. Whereas, India was the second top net crude oil products importer as of 2019. Regardless, the industry is also planning to enhance as much as an investment to result in the top oil & gas industry in the world.
The journey began in 1889, when India discovered the first oil deposits and gas fields in the town of Digboi, Assam. Later, India magnified the natural gas and oil industry in the 1960s and dilated the services to a pinnacle industry, and eventually bolstered the economy as a prominent industry in India.
The Oil and Gas Industry in India built reserves & Petrol stations etc. Besides, it cast the Indian economy in good terms of Imports, trading, refining, consumption, distribution, and foreign trade.
The oil and gas industries are further breakdown into three distinct parts. These parts are named Upstream companies, Midstream companies, and Downstream companies. The basic details about all the three companies are given below.
Classification of the Oil and Gas industry into three different companies
Upstream Companies:
The Oil and Gas Industry in India looks for dormant underground crude oil or natural gas by penetrating exploratory wells and extracting the resource to the surface. Notable Oil and Gas Industry in India Upstream attributes to the exploration and production sector.
Midstream Companies:
On the other hand, those extracted resources are meant to process, stored, marketed, and traded as exports. Therefore, Midstream companies function as a connection between the production area and the ultimate consumer location (marketplace).
Downstream Companies:
The third category of the Oil & Gas industry operates the part of oil refineries, petroleum products distributors, planters of petrol chemical stations, and retail outlets of natural gas.
Market size of Oil & Gas Industry in India
The Indian Oil & Gas industry became the third-largest consumer of oil in 2021 and planning to accomplish the position of the largest contributor to non-OECD petroleum consumption thrive.
As mentioned above, India attains as one of the topmost crude oil production abreast importers in the world. In recent times, a provisional refinery has been installed on the concurred of Government to burgeon as the Largest Domestic refiner at a worth of crude processing capacity of 1.24 million Barrels Per Stream Day (BPSD).
Last year the world faced a down economy because of the ongoing pandemic. According to the reports for the Financial year 2021, the industry faced a drawback in the exports of petroleum products which are estimated to fall from 65.7 to 56.8 MMT. However, with the change in the world stability, crude oil imports were recorded to rise sharply with the worth US $94.3 billion in FY 2022.
Export of Petroleum Products from India (MMT)
Nevertheless, still, the oil & gas industry in India showed a spiked percentage of 3.7% in the consumption of petroleum products which is comparable to the financial year 2019. In 2020, the Gas Authority of India Ltd. held the largest share of the country’s natural gas pipeline network.
For the year 2021, the industry anticipates enticing US corporations to invest around 25 billion dollars in Upstream companies by 2022. Additionally, the Oil & Gas industry in India showed a reduction in crude oil production which stood at 30.5 MMT for FY21, analogous to the 32.2 MMT in FY20.
The major plans and schemes for the Oil and Gas Industry can be seen in the Union Budget. The government has allocated funds worth INR 12,480 crores for direct benefit transfer of LPG and INR 1078 crores for feedback subsidy to BPCL / AssamGas Cracker Complex in the year 2021.
Prime minister Narendra Modi in February 2021, declared that INR 7.5 trillion will be invested by the Indian Government in improving Oil and Gas Infrastructure in the upcoming five years.
An LNG (Liquified Natural Gas) policy draft was published by the petroleum and Natural gas ministry and it aims at increasing the LNG regasification capacity of India.
In February 2022, Mr. Hardeep Singh (the minister of petroleum and natural gas) was noted to announce that India will increase its oil and gas exploration area to 0.5 million sq. km by the year 2025. He was also noted to further clarify that the exploration area will be increased to 1 million sq. km by the year 2030. These changes will be applied to increase the domestic output from the oil and gas sector.
Key Players to Look Out for in the Oil & Gas Industry in India
There are not many players in the Oil and gas sector of India. Yet, amongst them all, the top players in the Oil and Gas Industry in India that have made their mark are:
Key players for Oil and Gas industry in India
Reliance Industries Limited (RIL):
Reliance Industries Limited trades in the research and analysis of Oil and Gas and production is also a key part of the business concern. Reliance Petroleum headquartered in Ahmedabad, Gujarat founded in 2008 falls under the petroleum and natural gas industry. It was merged with Reliance Industries Limited in 2009.
Oil and Natural Gas Corporation (ONGC):
Oil and Natural Gas Corporation is a government-owned corporation that handles in production and distribution of crude oil and natural gas in India. In India, ONGC is the largest company that produces and explores oil and gas reserves. The company is owned by the petroleum and natural gas ministry of India and was founded in 1956.
Indian Oil Corporation Limited (IOCL):
Indian Oil Corporation is a publicly owned conglomerate. It is a property that is in the possession of the petroleum and natural gas ministry, Government of India. It is headquartered in New Delhi and was founded in June 1959.
India with its increasing population has increasing needs and this is true in the case of Oil and Gas procurement and usage in India. India is the third-largest consumer of Oil in the world. Petroleum products have the highest share of 14 percent in Indian exports.
This points out that the Oil and Gas industry is one main source of revenue for the country and the increasing energy demands of the country can only signify the rapid growth of the Oil and Gas Industry in India in the future.
FAQs
Where is India’s largest oil field located?
The largest oil field in India is Bombay high. It is known to be situated 161 km north of the Bombay coast in Mumbai, Maharashtra.
What is the future of the oil and gas industry in India?
The industry of oil and gas in India will be seen a decline in the use of biofuels, batteries, and hydrogen rather than consuming more non-renewable resources to fulfill the demand of citizens.
Who produces gas in India?
The major of the gas is produced in the Gujarat state of India. About 11% of gas is produced by Gujarat and the remaining is made by a bunch of states such as Andhra Pradesh, Assam, Tripura, Tamil Nadu, and Rajasthan.
What is the GDP percentage for the oil and gas industry in India?
The oil and gas industry is counted among the 8 core industries contributing to the Indian GDP. The oil and gas industry stands for 15% of the country’s Gross Domestic Product (GDP).
The pandemic has hit the Indian economy hard. Consumer demand has fallen drastically and the supply side of the market has become vulnerable to shocks and crunches. But it’s not all for these entrepreneurs. The latest addition to their list of woos is the ever-increasing price of petrol, which is a key manufacturing ingredient for many chemical and pharmaceutical processes and the backbone of energy-driven service startups.
The price of petrol has galloped upwards through 2020 and touched all-time highs in June 2021. The government has sighted several reasons for this hike in petrol price but all those claims have been shot down by independent policy experts and economists, who claim the real factor behind this meteoric rise in the price of petrol is the indirect tax levied on it by the Government of India.
Several economists, energy policy experts, and trade have requested the government to reduce this indirect tax on petrol to help increase the profitability of these already hard-hit startups and these requests have been backed by the State Bank of India (SBI) and Reserve Bank of India (RBI) in their annual and quarterly evaluations. Now, let’s have a look at the impact of the rise in petrol prices on startups, in a sector-wise manner.
The logistics sector is one of the hardest-hit sectors in the current economic scenario. The pandemic and rising fuel prices have helmed the conquest against this sector and have succeeded in closing doors for many budding startups and as well well-established companies.
With the increase in diesel and petrol prices, the startups in the logistics sector have been forced to increase the cost of their services to just breakeven and this, in turn, has led to shrinkage in demand.
Freight owners have complained about the lack of two-way cargo trips and how it has affected their profit model and them vulnerable to losses. Overall, the country’s mobility has been hard hit by this upward climb in the price of petrol.
The Reserve Bank of India has cautioned the government about the same in its reports on the Indian Economy and the depressionary spiral that the startups and MSMEs of this sector have become prone to, following the price of petrol and other energy commodities like diesel.
Impact on Startups in FMCG (Fast Moving Consumer Goods) Sector
Fast Moving Consumer Goods can be defined as products that are sold quickly over the counter and are bought by most consumers, irrespective of their preferences like biscuits, candies, medicines, etc. Due to the steady demand for these goods, the goods have to be shipped continuously to maintain the supply.
The startups here have faced acute problems with the rise in fuel prices. Due to increased freight costs and distribution costs, the cost of the products has gone up, which has led to the shrinkage of demand for the durable goods produced by these startups.
All this increased distribution has caused the firm to not even break even and decimated its profits. Also, like fuel is a key ingredient in meeting the energy demands of the production plants and some manufacturing processes, the inflationary push has caused extra trouble for the startups in the FMCG sector.
Impact on Startups in Appliances Industry
Currently, this sector is valued at 85,000 crores, and alone the domestic appliances sub-circuited is estimated to be 35,000 crores. The sector used to be one of the most thriving playgrounds for startups. But the increase in manufacturing and transporting costs owing to an increase in fuel prices have hard-hit many budding startups. Also, this increase in petrol and diesel prices has caused a cost-push in raw material, component supply, and operational costs.
Impact on Startups in the Pharma Sector
The pharma sector is no stranger to the hardships of increasing oil prices. Petrol and diesel play a huge role in the manufacturing aspect of this industry. The rise in the cost of fuel has, in turn, raised the cost of petrochemical raw inputs and the cost of operating the manufacturing unit.
Also, to maintain a steady supply of drugs in the markets, startups here have to maintain well-equipped fleets of freights. With the rise in the cost of petrol and diesel, the cost of maintaining and distributing the product through such a logistic mechanism has become excruciatingly expensive for startups to maintain.
Impact on Startups in the Core Manufacturing Sector
The core manufacturing sector acts as the backbone of our economy. Being on the most thriving playground for MSME startups, this sector has become the subject of many complex backlashes and ripple effects that accompany an increase in the price of an essential energy commodity like petrol.
The cost of production and maintenance of plants has shot up rapidly with the increase in fuel price. Petrochemical components have become costlier, along with the logistic cost of acquiring these key components of the manufacturing process.
The transportation cost of the finished product and distribution cost has pushed the market price to rise to combat the effects of the rise in diesel price. However, this increased shelf price has been met with a rapid demand shrinkage, which has put this sector in a difficult economic spot.
Impact on Startups in the Doorstep Service Industry
The doorstep service industry relies on the commitment to procure and provide already available services at the cheapest rate possible. The increase in petrol price has become a great impediment for the sector, as the logistic costs have risen sharply.
In the past few years, several internet-based startups have come up in this sector, but today most of them have had to close shop and the remaining strive hard to break even. Many economists suggest, that if the fuel price rises any more, the valuation of this industry can fall greatly, and most startups will fail to maintain their business model in the long run.
Conclusion
Thus, we can conclude the rampant increase in petrol price has a detrimental effect on the startup atmosphere of the country, irrespective of whichever sector they belong to. A further surge in petrol prices may become the key reason for the closing of startups in the coming months. However, it can be expected that the government will pay heed to the petrol price policy advice given by the apex bank, and eminent economists and reduce the petrol price to create a more business conducive atmosphere.
FAQs
What is the effect of the increase in the price of fuel?
The rise in fuel price affects the price of other essential goods as the transport costs increase. It also leads to inflation which affects businesses.
Will higher fuel prices lead to inflation?
Yes, higher fuel prices lead to inflation as the fuel price impacts all the goods and services.
Company Profile is an initiative by StartupTalky to publish verified information on different startups and organizations. The content in this post has been approved by Royal Dutch Shell.
The United States itself utilised an estimated 20.5 million barrels of petroleum per day in 2018, according to the US Energy Information Association. This equates to around 7.5 billion barrels per year or about 22% of estimated worldwide petroleum consumption.
As world economies and infrastructure keep relying significantly on petroleum-based commodities, the world’s dependency on oil and gas is escalating. Even with a weakening world economy and dwindling oil supplies, discussions about when the world’s oil and gas output would peak seem to remain on the outskirts.
Nevertheless, the oil and gas industry maintains to have great weight in global economics and politics, notably in employment conditions, with the US oil and gas industry employing at least 10 million people.
Shell is an oil & gas multinational business headquartered at The Shell Centre in London, United Kingdom. Shell is a publicly-traded corporation based in the United Kingdom that is primarily traded on the London Stock Exchange (LSE).
It is one of the “largest companies” in the oil and gas sector. Shell is one of the world’s largest corporations in terms of sales and earnings, consistently ranked in the top ten of the Fortune Global 500 since 2000.
Here’s learning all about Royal Dutch Shell, its Founders and Team, Funding and Investors, Business and Revenue Model, Growth, Challenges Faces, Name, Tagline, Logo and more.
Royal Dutch Shell – Company Highlights
Startup Name
Royal Dutch Shell
Predecessors
Royal Dutch Petroleum Co. (1890); Shell Transport and Trading Co. of the United Kingdom (1897)
Royal Dutch Shell is a multinational oil and gas business. The corporation looks for and produces oil and gas in traditional fields and sources such as tight rock, shale, and coal. It owns and runs refineries and petrochemical plants all around the world.
Shell sells lubricants, bitumen, and liquefied petroleum gas, as well as petrochemicals such as raw ingredients for plastics, paints, and detergents. In Brazil, the firm is a major biofuel producer. It’s also involved in liquefied natural gas (LNG) and gas-to-liquids (GTL) projects.
In Europe, Asia, Oceania, Africa, North America, and South America, the corporation sells its products directly and indirectly through distributors. The Hague, the Netherlands, is where Shell’s headquarters are located.
The business is categorized into three groups: upstream, downstream, and corporate.
The Upstream section searches for and extracts crude oil and natural gas, develops fields, produces oil and gas, mines oil sands, extracts bitumen, cools the gas, regasifies LNG, converts gas to liquid goods, and generates wind energy.
Oil refining into fuels and lubricants, petrochemical manufacturing, biofuel development, trading, rental sales, carbon dioxide emissions management, business-to-business sales, and alternative energy firms are all part of the Downstream segment.
Shell’s non-operating businesses, including its assets and treasury organisation, its headquarters and central services, and insurance firms, are included in the Corporate section.
Shell operates in over 99 countries, produces roughly 3.7 million barrels of oil equivalent per day, and has over 44,000 service stations throughout the world. Shell had total proven reserves of 11.1 billion barrels of oil equivalent, as of now.
One of its greatest businesses is Shell Oil Company, its main subsidiary in the United States. Royal Dutch Shell owns 44% of Razen, a publicly-traded joint venture with Cosan that is Brazil’s third-largest energy firm by revenue and a significant ethanol producer.
Royal Dutch Shell – Latest News
10 Jan 2022 – Oil and gas firm Royal Dutch Shell has surfaced as an unexpected bidder for Sprng Energy, Actis Llp’s Indian renewable system that is available for auction. Shell, the largest global seller of liquefied natural gas, will compete for the possible billion-dollar purchase alongside Macquarie, an Australian infrastructure fund, and CPP Investment Board (CPPIB), a Canadian pension fund.
After an initial round of screening from a list of over 20 possible applicants who had signed non-disclosure agreements, all three were selected last week. Shell’s non-binding equity bid of $1.2 billion is said to have beaten out all others. These assets have a $960 million debt.
Dec 15, 2021 – Indore-based green consultant EKI Energy Services will enter into a partnership with oil company Royal Dutch Shell that would invest $1.6 billion over five years to supply “environment-based solutions” to Indian industries.
As part of Shell’s strategy to develop in India’s renewables area, the joint venture would aim to produce 115 million carbon credits in the next five years. Shell will control the remaining 49 percent of the joint venture, with EKI Energy owning 51 percent.
Nov 16, 2021 – As the energy giant swings away from oil and gas, Royal Dutch Shell would ditch its dual share structure and relocate its headquarters to the United Kingdom from the Netherlands, forced out by Dutch taxation and facing climate pressure in court.
The business plans to delete “Royal Dutch” from its name, which has been an essential part of its brand since 1907, into becoming Shell Plc. It has previously faced challenges from investors about its dual structure and was recently struck by a Dutch court ruling over its climate ambitions.
Shell has been in a long-running legal battle with the Dutch government over the country’s 15% dividend withholding tax, which it attempted to dodge through its two share classes.
Shell’s new unitary structure would alleviate this problem and enable it to complete sales and acquisitions more quickly. The main Dutch state pension fund, ABP, said that it will withdraw Shell and all fossil fuels from its portfolio, further severing ties with the Netherlands.
Royal Dutch Shell – Industry
Oil prices have reached their greatest levels in six years, and the oil and gas industry has returned well during 2021. While the sector’s comeback is stronger than projected, market dynamics in the future year remain unpredictable.
After going negative in April 2020, oil prices have recovered to roughly $80/bbl. However, common thinking suggests that when oil prices are high, oil and gas firms would have less capital discipline and will focus on their core business rather than sustainable marketing options.
As a result, it is frequently considered that high oil costs will stifle the energy shift. Oil prices above $60 per barrel, according to 76 percent of questioned O&G executives, will most likely increase or enhance their energy revolution shortly.
The 2020 oil price fall resulted in the sharpest layoffs in the industry’s history. Since then, prices have roughly doubled, and yet only approximately half of the jobs being lost have returned. The industry’s credibility as a dependable employer is being harmed by periodic staffing and firing, and a tenured, ageing workforce is limiting potential talent.
In a congested labour market, it would be difficult for O&G firms with advanced initiatives and sound balance sheets to stand out to employees. Although a commitment to decarbonization may be the most compelling recruiting pitch, more than 75 percent of survey respondents believe that flexible and agile workforce structures that empower remote, hybrid, and cross-border teams will help companies compete for and retain talent in today’s tight labour market.
Once the firm combined with Royal Dutch to become the Royal Dutch Shell Group in 1907, ‘the Shell’ part of the company name started to deteriorate for a short time, but the newly established corporation rapidly became known as Shell for short.
Shell Logo
Royal Dutch Shell’s tagline says, “You Can Be Sure ofShell.”
Royal Dutch Shell – Founders
The Royal Dutch Shell Group was formed in February 1907 by the merger of two competing firms: the Royal Dutch Petroleum Company and the United Kingdom’s “Shell” Transportation and Trading Company Ltd.
When King William III of the Netherlands granted a Royal charter to a small oil exploration and production company known as “Royal Dutch Company for the Working of Petroleum Wells in the Dutch East Indies,” Jean Baptiste August Kessler and Henri Deterding founded the Royal Dutch Petroleum Company in 1890.
Marcus Samuel and his brother Samuel Samuel formed the “Shell” Transport and Trading Company in 1897 in the United Kingdom.
Royal Dutch Shell – Startup Story
The Royal Dutch Shell Group was formed in February 1907 by the merger of two competitor companies: the Royal Dutch Petroleum Company and the United Kingdom’s “Shell” Transport and Trading Company Ltd. It was mainly motivated by the necessity to compete with Standard Oil on a worldwide scale.
According to the conditions of the merger, the Dutch arm would hold 60% of the new company and the British would own 40%. A comprehensive merger or acquisition of either company would be prohibited by patriotic sentiments.
Koninklijke Nederlandsche Petroleum, a Dutch business, was in charge of production in The Hague. The Anglo-Saxon Petroleum Company, located in London, was founded to oversee the storage and transportation of the goods.
Shell was the primary fuel provider to the British Expeditionary Force during WW 2. This was the only source of aircraft fuel and 80 percent of the TNT used by the British Army. Also, it offered the British Admiralty all of its vessels.
Shell purchased the Mexican Eagle Petroleum Company in 1919 and founded Shell-Mex Limited in 1921, which sold products in the United Kingdom under the “Shell” and “Eagle” trademarks. Shell Chemicals was formed in 1929. Shell was the world’s top oil business by the end of the 1920s, generating 11% of the globe’s crude oil supply and holding 10% of the world’s tanker traffic.
Royal Dutch Shell – Vision, and Mission Statement
Royal Dutch Shell’s mission statement says, “To safely market and distribute energy and petrochemical products while offering innovative value-added services.”
Royal Dutch Shell’s vision statement says, ” They make the difference through our people, a team of dedicated professionals, who value our customers, deliver on our promises and contribute to sustainable development. “
Michiel Brandjes – Company Secretary and General Counsel
Simon Henry – Shell Oil Company Investor Relations
Steve Mutch – Next Generation ERP COE Lead
Daniel Jeavons – VP Computational Science & Digital Innovation
Ed Daniels – Executive Vice President – Strategy & Portfolio
Gillian Hynes – Senior Talent Advisor, Downstream
Nick Feast – Special Advisor, Exploration
Royal Dutch Shell – Business Model, and Revenue Model
The company’s primary business is hydrocarbon exploration, production, processing, transportation, and marketing (oil and gas). Shell also has a sizable petrochemicals company (Shell Chemicals) and a fledgling renewable energy sector that is exploring wind, hydrogen, and solar power.
The business is categorized into three groups: upstream, downstream, and corporate.
The Upstream section searches for and extracts crude oil and natural gas, develops fields, produces oil and gas, mines oil sands, extracts bitumen, cools the gas, regasifies LNG, converts gas to liquid goods, and generates wind energy.
Oil refining into fuels and lubricants, petrochemical manufacturing, biofuel development, trading, rental sales, carbon dioxide emissions management, business-to-business sales, and alternative energy firms are all part of the Downstream segment.
Shell’s non-operating businesses, including its assets and treasury organisation, its headquarters and central services, and insurance firms, are included in the Corporate section.
Royal Dutch Shell – Funding, and Investors
Royal Dutch Shell has secured $750 million in a single round of fundraising.
Date
Round
Amount
Lead Investors
Oct 27, 2021
Post-IPO Equity
$750M
Third Point
Royal Dutch Shell – Investments
Royal Dutch Shell has invested in 18 companies.
Date
Organisation Name
Round
Amount
Jan 6, 2022
Silicon Ranch
Private Equity Round
$775M
Dec 16, 2020
Silicon Ranch
Private Equity Round
$225M
Aug 21, 2020
RVE.SOL
Grant
–
Apr 16, 2020
Haishangxian
Funding Round
–
Dec 12, 2019
Esco Pacific
Corporate Round
–
Nov 5, 2019
Powergen Renewable Energy
Series B
$15M
Apr 3, 2019
EcoSmart Solution
Corporate Round
–
Dec 19, 2018
Cleantech Solar
Corporate Round
–
Aug 28, 2018
Zhenkunxing
Series C
$129M
Aug 28, 2018
Zhenkunhang
Series C
$129M
Royal Dutch Shell – Acquisitions
Royal Dutch Shell has acquired 13 companies.
Acquiree Name
About Acquiree
Date
Acquisition Amount
Savion
Savion develops utility-scale, greenfield solar photovoltaic power projects across the country for renewable and cost-effective energy.
Dec 14, 2021
–
Inspire Energy Capital
Inspire Energy Capital offers renewable energy to customers via a variety of innovative services.
Jul 28, 2021
–
Next Kraftwerke
Next Kraftwerke is the operator of a Virtual Power Plant (VPP ) & a trader on various European power markets.
Feb 25, 2021
–
ubitricity
Ubitricity focuses on developing charging infrastructure for electric vehicles.
Jan 25, 2021
–
Eolfi
EOLFI is an independent company specializing in wind energy.
Nov 5, 2019
–
Sonnen
Sonnen is a pioneer for intelligent lithium-based energy storage.
Feb 15, 2019
–
Greenlots
Greenlots delivers innovative software, services, and expertise that empowers utilities, cities, communities, and automakers.
Jan 30, 2019
–
Hazira LNG and Port
Hazira LNG and Port is an energy company that is engaged in creating long-term wealth for the benefit of the country.
Jan 9, 2019
–
First Utility
First Utility is an independent energy supplier in the UK which helps customers save money on their energy bills.
Dec 21, 2017
–
NewMotion
Electric Mobility Service Provider
Oct 12, 2017
–
Royal Dutch Shell – Growth
Royal Dutch Shell’s revenue for the quarter ended September 30, 2021, was $61.555 billion, up 37.65% from the previous year.
Royal Dutch Shell’s revenue for the year ended September 30, 2021, was $227.462 billion, up 1.89 percent from the previous year.
Royal Dutch Shell’s yearly revenue in 2020 was $183.195 billion, down 47.97 percent from 2019.
Royal Dutch Shell’s yearly revenue in 2019 was $352.106 billion, down 11.21 percent from 2018.
The yearly income of Royal Dutch Shell was $396.556 billion in 2018, up 27.15 percent from 2017.
For more than a century, the oil sector has been immersed in operations globally, and it has seen many hazards connected with working in diverse nations at the same moment. Shell, which is operating in more than 70 countries around the globe, experienced several issues as a result of its business methods, technology, and operational environment.
The company had the most serious issues which include its business in Nigeria, where it was a victim of oil theft and pilferage, resulting in massive setbacks; its Arctic venture, where it encountered technical difficulties as well as issues with local environmental conservation groups; and its US shale operational processes, where Shell received no returns despite significant investments.
As of May 2021, Shell’s proposal got 88.74 percent of shareholder votes, according to the firm. The executive of the Anglo-Dutch oil company had asked for endorsement for its Energy Transition Strategy, which received the first vote of its sort in the energy industry.
While the outcome was not binding, it was considered likely and theoretically gives Shell a shareholder authorization to pursue its goals to achieve net-zero emissions by 2050. However, 11% of Shell’s stockholders voted against the company’s own climate goals. In contrast, up to 99 percent of investors accepted management advice on 19 other resolutions proposed during the online AGM.
At this time, over five years after the Paris Agreement was approved by almost 200 nations, no oil and natural gas major has revealed how it plans to meet its ambitions of being a net-zero firm by 2050 or before.
The historic climate change agreement is largely seen as vital to averting an irreparable global calamity. Shell’s Energy Transition Strategy, which was released earlier this year, detailed the company’s goals to achieve net-zero emissions by 2050.
It plans to cut net carbon emissions by 6% to 8% by 2023, compared to 2016 levels. By 2030, the goal has risen to 20%, 45 per cent by 2035, and 100 per cent by 2050. The firm has said that it would alter its strategy every three years until 2050.
Royal Dutch Shell – FAQ
What does Shell do?
Shell is an oil & gas multinational business headquartered at The Shell Centre in London, United Kingdom. It owns and runs refineries and petrochemical plants all around the world. Shell sells lubricants, bitumen, and liquefied petroleum gas, as well as petrochemicals such as raw ingredients for plastics, paints, and detergents.
How does Shell make money?
The company’s primary business is hydrocarbon exploration, production, processing, transportation, and marketing (oil and gas). Shell also has a sizable petrochemicals company (Shell Chemicals) and a fledgling renewable energy sector that is exploring wind, hydrogen, and solar power.
Which companies do Shell compete with?
Imperial Oil Limited, ConocoPhillips Company, Chevron Corporation, Exxon Mobil Corporation, BP p.l.c, Petro-Canada, Hess Corporation. 2,075, and ADNOC.
When did Shell come to India?
Shell entered India with its retail fuel business in November 2004.
The price of fuel has always been a concerning issue in the country. When the pricing of Fuel rises, it majorly impacts the lives of the common man and the wholesome economy. And, soon after the latest round of fuel price hike by the OMCs (Oil Marketing Companies), the prices of petrol and diesel increased prominently. And if the prices keep on increasing, the lives of citizens and the economy will be highly affected.
The price of Petrol has reached up to INR 90 per litre and in some places, it has crossed the limit of Rs 100. And The same case with the Diesel too.
The increased fuel pricing has become such a problem that people are even smuggling from neighbouring countries. The rise in fuel price brings a devastating impact on the economy majorly, which is already suffering from the Covid crisis.
The rise in fuel prices affects most transportation industries. Also, businesses depend on logistics and transportation chains.
In this article, we have discussed the effects of increased fuel prices on the economy including other industries and to the lives of common people. Let’s get started!
When the fuel prices rise, we know businesses and households are affected broadly. However, it impacts majorly through two things- Inflation and reduced economic growth. Let’s get started with Inflation first,
Inflation
In inflation, the products made up of petroleum are affected directly. Moreover, it indirectly affects the industries of manufacturing, heating and transportation. This can lead to an increase in the price of many other products and services.
And according to the increase in fuel price, the consumption price also increases based on the production.
Reduced Economic Growth
The increased price of oil highly affects the economy as well. It reduces the growth of the economy through the demands and merchandise of goods other than fuel. It reduces the demands of those goods because of the increased price of producing them.
How Increased Fuel Prices Affects Other Industries?
Retailers
As fuel is the basic essential to transportation for every mankind. Therefore, they spend a large fraction of their income on fuel purchasing and due to this, the retailers suffer the most as the discretionary spending’s by customers become very low. And if the fuel prices rise, the supplier would deliver its products very rarely to the malls and shopping centres.
And this would highly affect the marketing sector and increase every material’s price.
Public Transportation
When the fuel prices rise, people often prefer public transportation ridership. Because sharing the transport would cost less compared to driving your own vehicle with so expensive fuel in the tank. This also saves from the wastage of fuel in the traffic and would cost less for people. The usage of public transportation is becoming higher in every place with the increased fuel prices.
Airlines
Airlines’ largest operating cost goes to the fuel expenses which is directly related to oil procurement. When the fuel prices rise, the airlines are affected broadly from the core of their surface.
Therefore, when the fuel prices rise the airlines are compelled to increase the charges on the flight tickets from their customers. This results in fewer airways travelling and a huge burden of expenses for the people.
So when such a scenario happens, the airlines tend to buy or sell the future estimated fuel prices through the investment perspectives. This is called fuel hedging. Besides, this will protect the airlines against the increased fuel prices.
Automobile Industry
The automobile industry is widely dependent on fuel consumption. These industries would fall apart if the fuel prices keep increasing. That’s why the automobile industry put its main focus on the manufacturing of smaller, fuel-efficient vehicles such as electric or hybrid vehicles. These could travel up to 250 miles based on their charging extent.
People have also highly preferred such modification and the purchasing of these vehicles has been increasing over time.
In the 1970s, the two aforementioned huge fuel shocks were noted based on high unemployment and low growth. This period is also referred to as Stagflation. So it’s likely to say that the fuel prices are directly linked to the economy and anything if unusual happens, the economy is affected majorly. The fuel prices cause a wide fluctuation in the economy of the country.
Looking back at history, the 1990s and 2000s were recorded as the most huge economic fluctuation period compared similarly to the fuel shocks of the 70s. The relationship between these two could be very convenient as well as challenging. This widely affected the GDP growth and unemployment rate in the country.
Conclusion
Over a long time, many economists and analysts have debated on the extent of the effect caused by the fuel prices on the economy of the country and the lives of common people. However, with the recorded research and data we can not deny the fact that the spending habits, consumers confidence correlates with the increased fuel prices.
And when the price of fuel increases, the economy including many other industries are affected on a wide scale and results in some absolute alternatives or faces loss. The lives of normal people have affected the most and this benefits some industries as well as cause some major loss to others.
Many surveys have been made on such situations and all those have proved some relation either direct or indirect between the fuel prices and economy of the country.
FAQ
Which industries are affected by the oil prices?
Airlines, Transportation and Automobiles are some of the most affected sectors by the rising fuel prices.
Why are fuel prices increasing in India?
Fuel prices have been rising in India due to a rise in crude oil prices in the international market.
The recent news about the blockage of the Suez Canal has gained a lot of popularity on social media. The pictures of the blockage have been widely spread in the online world as memes. But the economic outcomes of the blockage of Suez canal are severe.
Let’s look at the Economic Outcomes of the Suez Canal crisis
A giant cargo ship which is 400 meter in length has blocked the Suez Canal. The Canal has been blocked by the ship for the past few days. The ship which is operated by the Taiwanese transport company evergreen marine is one of the world’s largest biggest container vessels.
The ship weighs 200,000 tones and has a maximum capacity of 20,000 containers. It is said that the ship had lost control after it entered the narrow passage of the Suez Canal from the Red Sea. The salvage company which is trying to refloat the ship has said that it might take weeks for them to complete the task.
Peter Berdowski who is the CEO of Dutch company Boskalis who is also one of the rescue teams trying to free the ship has said that depending on the situation, they can’t exclude that it might take weeks.
Economic outcome of the Suez Canal crisis
The ship has stopped 12% of the world’s seaborne trade and has already cost losses of billions. Almost 50 percent of the container ships pass through the Canal on a daily basis and around 30% of the global container traffic passes through it. The current situation is expected to cause a great damage to the global trade. It is expected that the prices of all essential commodities will increase.
The experts fear that the blockage has led to severe effect on the economy and the global trade. The blockage is costing around 400 million (around INR 2.8k crores) per hour, as ships are asked to take a longer route to reach their destinations.
Experts have said that this is the worst ship blockage ever witnessed. It is said that many cargo ships which have been diverted would take another 5-6 days to reach their destination.
Effect on Crude oil prices
It is said that more than 200 containers carry crude oils through the Canal on a daily basis. Experts have also told that the major hit would be for the small tankers and the crude oil exports from Europe to Asia.
The director of Asia oil at FGE Sri Paravaikkarasu has said that around 20% of Asia’s Naphtha which is crude oil is supplied through the Suez Canal. He said that re-routing of the ships would add more amount of fuel consumption for the ships that is around 800 tones and increase its operating expenses.
The shortage in the availability of the crude oil will lead to a jump in the crude oil prices. It is said that the crude oil prices have already increased due to the fear of the crude oil Suez Canal blockage in the past few days.
Data from Refinitiv has suggested that around 30 oil tankers have been waiting at both the sides of the Suez Canal. David Fyfe who is a chief economist at Argus Media which is a market research firm said that around 5-10 percent of the global shipments passing through the Suez Canal are crude oil, refined oil, and liquefied natural gas shipments.
Lars Jensen who is an independent container shipping expert based in Denmark has said that basically anything you see in the stores would be in shortage because of the blockage in the Suez Canal.
This includes everything from toilet papers, coffee, furniture, clothes, shoes, exercise equipment to car parts, carpets, and electronics. The blockage has also delayed e-commerce product deliveries which even include food.
Ian woods who is a marine cargo lawyer and partner at the London-based firm Clyde and Co. has said that, there are commodities worth millions of dollars on other ships waiting for the blockage to be cleared.
If the blockage is not cleared quickly then they would consider taking longer routes which will increase the operational charges and these extra charges will be carried down to the consumers.
It is said that eventually the consumers will have to pay the price and this blockage would have a deep impact on the end consumers. The exact amount and the exact effect of the blockage are not yet analyzed but the more it delays the consequences will increase.
Each day of delay will add more billions of dollars of losses towards the global trade and the economy.
FAQ
What country owns the Suez Canal?
The Suez Canal is operated and owned by Egypt.
What country built the Suez Canal?
In 1854, Ferdinand de Lesseps, the former French consul to Cairo, secured an agreement with the Ottoman governor of Egypt to build a canal 100 miles across the Suez.
Why did Great Britain want to control the Suez Canal?
Great Britain wanted to control the Suez canal, because it allowed them quicker access to its colonies in Asia and Africa.
When did Britain buy the Suez Canal?
In 1875 Britain bought Suez Canal from the Egyptians in £4million worth of shares.
Conclusion
However, Egypt’s Suez Canal Authority is looking forward to cooperating with the United States in efforts to refloat the container ship which has blocked the Suez Canal for the past few days. According to Arab News, the Canal revenue for Egypt was $5.6 billion in 2020.
Transportation is a necessity, and the economic aspect of the world is heavily dependent on it. The trade sector involves Marine transportation for the moving of over 10 billion tonnes of containers, and solid and liquid bulk cargo across the world’s oceans annually. It wouldn’t be wrong to say that marine transport is carrying international trade and the economy on its shoulders for a long time.
Marine transportation is considered the most important option for Global trade as billion of tons of containers are moving across the seas every year. Marine transportation is preferred for many reasons. One of the most significant ones is the transportation through it is cost-effective. Transportation companies around the world understand that as it is cost-effective and heavy items can be carried anywhere with their help of them, the dependency of trade is heavy on this sector as well. In this article, we will talk about the top marine transportation company in the world. So let’s get started.
Founder – Arnold Peter Moller and Peter Maersk Moller
Founded – 1904
APM-Maersk Logo
APM Terminals operates one of the world’s most wide-ranging ports. Since 1996 Maersk has been the largest container ship and has been supply trader in the world. One can find it in over 130 countries. The corporation situated in Denmark Terminals is continuously focussing on serving the serving shipping lines as well as the landside customers in the growth of their businesses. They continuously work on making their supply chain quick and efficient.
Mediterranean Shipping Company
Founder – Gianluigi Aponte
Founded – 1970
Mediterranean Shipping Company Logo
Mediterranean Shipping Company (MSC), the world’s second-largest shipping line, started its journey in 1970. Mediterranean Shipping Company S.A. is a Swiss-Italian international shipping line. Mediterranean Shipping Company is said to offer its service globally and is considered one of the top leading companies in global container shipping. As of now, the Mediterranean Shipping Company has 664 container ships under its control.
China Ocean Shipping Company
Founder – Government of China
Founded – 1961
China Ocean Shipping Company Logo
China Ocean Shipping Company (COSCO) is a Chinese state-owned company and its headquarters is situated in Shanghai. The company is the result of the merger of COSCO Group and China Shipping Group. COSCO Shipping Logistics’ main aim is to serve and make shipping goods convenient for their customers. The company is serving worldwide with its service and it operates over 362 international and domestic shipping routes and has over 1349 vessels for use.
CMA-CGM
Founder – Jacques Saade
Founded – 1978
CMA-CGM Logo
CMA CGM S.A. is a freight and shipping company. it is also said to be the third-largest shipping company in the world. CMA CGM is present in 160 countries and serving the people of more than 420 ports for a long time. The headquarters of the company is situated in Marseille, France. The Company not only offers container transportation but also deals with different logistics companies, cargo cruises, and other transportation services.
Hapag-Lloyd
Founder – Albert Ballin
Founded – 1970
Hapag-Lloyd Logo
This German shipping and container transportation company is considered as the 5th largest container carrier in the world depending on its vessel capacity. It is currently the world’s fifth-largest container carrier in terms of vessel capacity. Hapag-Lloyed with its technology provides you with a tracking facility where you can trace your containers and their movements. The company is known for shipping dangerous and sensitive goods and has specialised in cargo projects.
Ocean Network Express
Founder – Nippon Yusen, Mitsui O.S.K Lines and K Line
Founded – 2017
Ocean Network Express Logo
Ocean Network Express (ONE) is a container shipping company whose headquarters is situated in Singapore. Ocean Network Express is serving over 100 countries Ocean Network Express is said to be the 7th largest in the world with its fleet size and serving over 120 countries. Ocean Network works hard to improve its tracking service so that its customers can easily track the movements of their shipments and manage them without any problem.
Evergreen Line
Founder – Chanf Yung-fa
Founded – 1968
Evergreen Line Logo
Evergreen Line is a shipping and Container transportation company and its headquarters is situated in Luzhu District, Taiwan. Evergreen has over 150 container ships that are served worldwide in about 80 countries and are considered the fifth-largest marine shipping company. Apart from marine transportation the company’s activities also include management of ports, construction of ships, engineering and real estate development.
Yang Ming Marine Transport
Founder – Lee Hong-Chung
Founded – 1972
Yang Ming Marine Transport Logo
Yang Ming Marine Transport Corporation is a company that deals with shipping containers and whose headquarters are situated in Taiwan. Apart from shipping containers the company also provides the service of passenger transportation, it mainly deals with cargo ships both domestic and international. Trading of ships, manufacturing, and giving them for lease are also included in this business. Yang Ming works with over 93 vessels and has over 101 container ships.
Hyundai Merchant Marine
Founded – 1976
Hyundai Merchant Marine Logo
Hyundai Merchant Marine (HMM), the container transportation and shipping company is said to be the world’s largest container line as per its vessel capacity. The South Korean company has been the number one container carrier for the country and the larger portion of the exports of South Korea is dealt by HMM. it is also one of the top logistics companies in the world and its targeted market is worldwide. Most of the time, HMM transports products like crude oil, iron, coal and other import and export products.
Pacific International Line
Founder – Chang Yun Ghung
Founded – 1967
Pacific International Line Logo
Pacific International Lines (PIL) is a shipping company whose headquarters is situated in Singapore. PIL has over 18000 employees and the company is serving over 100 countries and have 500 ports under its control. The company mainly deals with third-party logistics services and it has a fleet of 156 vessels that are used by its customers to carry different types of goods.
Conclusion
Marine transportation holds great importance globally. It creates a big impact on a country’s economy as well. These top marine transportation companies play a big role in transporting goods to different places. The import and export sector complete depends on marine transportation. The world is a global village, with time marine transportation has become one of the most important sectors and it will only grow in future as well.
FAQs
Why Marine Transportation is important?
Marine Transportation is important because it plays a big role in the global economy, 80% of worldwide trades depend on it.
Who founded Pacific International Lines?
Pacific International Lines was founded by Chang Yun Ghung in 1967.
As everyone is aware of the COVID-19 situation the world is facing right now. On the brink of this cliff, we can just hope that everything goes back to normal. Into the list of unprecedented victims, the Oil Industry has been added to it successfully. The chaotic change in the prices of Oil during COVID-19 outbreak is like adding fuel to the fire.
The recent news about Super Contago(when the space to store the tangible products is running out due to excess supply)has shook the world inside out. This pandemic is going to be near about compared with the 2008 depression.
The surge in supply of crude oil was due to lack of demand across the world. The world implementing complete lockdown has brought the global Oil Industries to an acute dearth of available storage facilities. The sudden termination in the utility of the fuels has worsened the situation. Oil Industries were already under pressure from lower oil and fuel prices because of a warm winter even before the COVID-19 outbreak and the price war between Saudi Arabia and Russia.
For the first time in history, WTIcrude oil prices fell below $0 per barrel and entered into the negative territory.
As there is no early hope of how to recover from this situation in the near future, the key issue of Oil inventory storage is likely to remain. If the Oil and fuels are stored at the pennies, the non-Saudi shale companies would have to pay to dispose the excess stock off. And as a result, they may have to further narrow the rate of production by shutting down their rigs and oil wells to avoid plunging into deeper financial troubles.
Reasons of decline in Oil Industry due to COVID-19
With history and the growing tension between the USA and Saudi Arabia regarding the Oil prices and the export business. The shale players were already tested with their limits even before the pandemic. COVID-19 is not the major reason why Oil prices are falling.
The world i.e. direct or indirect dealers in Oil market are either tested positive of COVID-19 or too cautious to take a physical step forward.
The interested dealers reside in an area which have been quarantined or are facing national lockdown.
Surge in oil prices can reduce demand for other goods because they reduce wealth, as well as induce sheer uncertainty about the future. The rise in Oil price can also suppress the growth of the economy through their effect on the supply and demand for goods other than oil.
Iran faced a decline in oil prices. The majority of revenue took a hit due to the unexpected outbreak of COVID-19. The price of Iran’s heavy crude plummeted to below $14/barrel down from $44 or more per barrel in February. It also had to allow it’s buyers to come directly with it’s tankers to it’s refineries, plug in and fill up. Thus removing transit fee, insurance and whatever maritime indemnity from the cost of each barrel.
Iran and Iraq want to produce enough to satisfy their markets by offering to produce more to gain new markets, and deliver through their own agents. But the problem here missed is, an offer in the international market doesn’t happen overnight.
Saudi Arabia cuts down the price oil in a day since the 1991 Gulf War, estimating the prices further could fall $20 a barrel. Whereas, Saudi Arabia needs oil prices at around $82 to balance the market.
Angola, Algeria and Venezuala are suffering the most by loosing around 85% of their oil and gas revenue this year.
The dispute between tow biggest oil producers which are Saudi Arabia and Russia has pushed the oil prices in four years.
China, the world’s biggest oil importer, is now consuming much less oil and energy due to disruption in the manufacturing industries. Moreover, Countries would rather stock up the bottles of fresh water, poultry products, meat, vegetables, pharmaceuticals and other necessities rather than burning fuel.
Graph of oil prices over the passage of years
OPEC members and its allies finally agreed to make a deal to slash global output by about 10%. Therefore, the deal led to largest cut in oil production ever.
There are number of ways we can look into this due to the slump in oil prices.
Impact of Oil prices on Indian Economy
Almost 85% of oil is imported from the big oil industries. Low oil prices reduces India’s import bills and it can also give space to the government to increase fuel taxes, offsetting low direct tax collection. Furthermore, low oil and petroleum costs also bring down the energy prices, moderating the inflation rate. “India being a net oil import contributor tends to gain immensely from oil prices drop on its import bill,” Madhavi Arora, Economist.
Indian Economy has a possibility of getting a hike of 1.4% points GDP.
It is interesting to mark that the prices for retailers/investors have not been reduced since the government is using the buffer amount to fund its expenses. However, once the lockdown comes to an end, the government faces increased pressure to reduce the fuel prices for consumers.
However, the oil industries are in deep trouble due to terrific crash in demand. Dealers and Refiners imported a tons of crude oil before price crash resulting heavy inventory losses, with negligible sales revenue and repeating the cycle.
An add on to this fiasco, from a consumer’s point of view, is that reduced oil prices help in slowing inflation.Also, there are many possible ways to measure real oil prices, depending on which measure of inflation you use.
