Demand & Market

Analysis of Crude
Oil
Team A-6
Adarsha Naman (002)
Devesh Mohta (017)
Pooja Kumari Singh (031)
Soumit Goswami (046)
Swanak Goswami (047)
Swarit Grover (048)
Ishan Raval (163)
Product
Description
Crude oil is a raw natural resource that is extracted
from the earth and refined into products such as
gasoline, jet fuel, and other petroleum products
Almost all crude oil ranges from 82 to 87% carbon
by weight and 12 to 15% hydrogen by weight.
Crude density is measured by API gravity
- API gravity provides a relative measure of crude
-The higher the API number, the lighter the crude
Crude sulfur content is measured as a percentage
- Less than 0.7% sulfur content = sweet
- Greater than 0.7% sulfur content = sour
 Industry
Outlook
India imports 82% of its oil needs and aims to bring that
down to 67% by 2022 by replacing it with local exploration,
renewable energy and indigenous ethanol fuel. India was
the second top net crude oil (including crude oil products)
importer of 205.3 Mt in 2019.

By March 2021, India’s domestic crude oil production

output fell by 5.2% and natural gas production by 8.1% in
the FY21 as producers extracted 30,491.7 thousand
Metric Tonnes (TMT) of crude oil and 28670.6 Million
Metric Standard Cubic Metres (MMSCM) of natural gas in
the fiscal
Data Determinants of Demand: The factors
that
determine thedetermine
factors that demand for
thethe product
demand of are
the
product
as are:
follows:
Sale Quantity ('000 tonnes)
Price of crude Oil
Per capita income
Price of Natural Gas
Population
Price of crude oil
based lubricants

Data Sources: All the given data have

been obtained from various secondary
sources; For quantity sales and price of
the product we referred to CMIE database
and for Per Capita Income we referred to
www.rbi.gov.in
 Analysis:
Statistical The correlation coefficient(0.89) indicates a
strong uphill (positive) linear relationship
Analysis between the variables
R-Square value of ~80% shows the
variation of a dependent variable that can be
attributed to the independent variables.
Adjusted R2 is coming 67%, which shows
that 67% of the variation in the output
variable is explained by the input variables.
Significance F value is 0.01, which means
that demand data is perfectly fitted.
Assumptions:
Px= Price of Crude Oil
Demand Equation: Y= Per capita NNI
Pg= Price of Natural gas
N= Population
PL= Price of lubricants
Price elasticity
forecasting
 In comparison to other countries, Indians today pay more rupees
for a litre of oil. India exports refined oil at cost plus + refinery
costs to nations such as Nepal and Bhutan. This is the primary
reason why gasoline and diesel in our neighbouring countries are
less expensive.

Global
Fuel
Price
Analysis
Taxation on Fuel:
India now has the highest taxes
on fuel in the world. That means
every litre of petrol in Delhi that
currently retails at Rs 94.55
includes taxes of Rs 58.5 while
for every litre of petrol and for
diesel at Rs 85.44 it is Rs 46.9.
 Business
M20.3%
odel
49.3% of the revenue comes from refining and petroleum business
comes from petrochemicals
18.7% comes from Retail
7% comes from digital services
4.7% from Media, Entertainment and others
Reliance Jio has built a world-class all-IP data, the only greenfield all-IP network supporting Voice over
LTE (VoLTE) technology but the revenue driver is still the petroleum business. On the profitability side,
68.26% of EBIT is contributed by energy business and 31.74% is from the retail and consumer-facing
business.
It accounts for over 5% of the Indian Government's revenues
Contributes 8% of the total merchandise exports from India
M arket
RIL has over 30 lakh shareholders, the Ambani family holds nearly 52% of the total shares.
Share
Earnings per share (EPS) increase by 8.6% a year over the past three years
Currently, the market price of RIL shares is Rs 2609.20
Challenges
ABCD ABCD

Future Prospects
Reliance Industries Ltd intends to be a net carbon zero
company by 2035.
The company aims to recycle CO2 to fight the chemical
change.