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1. S.Y.B.COM
SEMESTER-3
Government Commerce College

2. Oil Crisis
Name
Sonkusare Yogesh .M.
Maulik
Ashish
Prajapati Yatin .N.
Prajapati Vimal .A.
Roll No
754
656
692
708
707
Topics
Introduction
History of 1973(1st)
What is the role of
OPEC?
Impact on
Automobile Industry
Impact on Countries.

3. Name
Patel Nikhil .A.
Patil Vishal .M.
Thakur Saumil .A.
Urkude Aakash .N.
Roll No
678
691
764
772
Topics
History of 1979(2st)
Impact of 1979.
Indian Economy
Conclusion & News
regarding Crude Oil.

4. Introduction
 Crude Oil = Unrefined Oil / Unrefined Petroleum. It is Non-Renewable
resources.
 After Refining Crude Oil, there are many types of Petroleum Products & By-
Product(Secondary Products) are available.
 1)Petroleum Products:-
Petrol, Diesel, Jet Fuel, Automobile Lubricants Oil, Automobile Grease,
Industrial Grease, Rail Road Oil & Other.
2)By- Product(Secondary Product):-
 It is produced from petroleum waste.
 Over 6000 products or more are there.
 Mainly 3 Products. (Fertilizers, Perfume, Insecticides)
 In the Year 1931, crude oil sells for 10 cents per barrel.
(10 cents = Rs 6.42 in India.)
 In 1973, it was U.S. dollar 3 per barrel. But after 1973, oil price goes up from
dollar 3 to dollar 12 per barrel.

5. History of 1973, 1st Oil Crisis.
(Quadrupling of Price)
 Oil crisis started when Egypt & Syria launched a surprise attack military
campaign against Israel on October, 1973. The month of Ramadan for
Muslim, the Holiest Day in Judaism i.e. Yom Kippur War.

6.  The fighting took place in Sinai & Holan Height, the territories' that
had been occupied at Six Day War , 1967.
 Because of United States support for Israel in Yom Kippur War, Arab
member’s put an oil embargo.
 This embargo was targeted at nation who support Israel in this war.
Arab member(OAPEC) cut the production & stop exporting to U.S.
 At an OPEC meeting held on March 18,1974, seven members lift the
ban exports to U.S.
 By the end of oil embargo, the price rose from U.S. dollar 3 per barrel
to dollar 12 per barrel , which is 4 times or 400% of dollar 3 per barrel.

7. What is the Role of OPEC?
 OPEC = Organization of Petroleum Exporting Countries.
 OPEC was founded in Baghdad, by the first 5 member – Iran, Iraq,
Kuwait, Saudi Arabia, Venezuela. (From Middle East) It
headquarter is in Vienna, Austria.
 Vienna is the capital & largest city of Austria & a metropolitan
city.
 In India, metropolitan city are 1) New Delhi 2)Mumbai 3)Chennai
4) Kolkata.
 OPEC has 14 member as of May 2017.
 Total world oil production in 2016, averaged 80 crores barrel per
day.

8.  According to U.S., Energy Information Administration Report,
• Rate of oil production represent 44% of world total in 2016.
• OPEC accounted for 73% of world “Proven” oil reserve,
including 48% from just 6 Middle east Countries.
 OPEC’s Three Goals,
1. To keep price stable.
2. To reduce oil price fluctuate.
3. To adjust the world’s oil supply in response to shortage.
 Because of OPEC held a meeting, the oil embargo was removed
from United States, by rising oil prices U.S. dollar 3 to dollar 12
per barrel.
 Non OPEC members are Mexico, Norway, Oman, Russia.
• Many Non-OPEC member voluntary adjust their oil
production in response to OPEC’s decision.

9. Impact on Automobile Industry
1. Rise of Foreign Automakers in U.S.A:-
• Before 1973, 13% cars were imported in U.S.A.
• After 1973, Import of cars in U.S.A rose from 13% to 20%
2. Loss of Reputation:-
• Because of oil crisis, demand of smaller cars had rose. Resulted
into Branded cars like Cadillac & Lincoln become less in demand.
3. CAFE Standard:-
• CAFE = Corporate Average Fuel Economy
• In U.S., cars mileage was 7 km /litre.
• But after CAFE standard was established, cars mileage become
11 km/l in 2008.
• In India, cars mileage is 25km/litre as of 2016.

10. 4. New Speed Limit:-
• Because of oil crisis, average speed limit were reduced from
1) 112 KM/H to 90 KM/H.
2) 80 KM/H to 60 KM/H.
5. Build of Smaller Cars & Death of Muscle Cars:-
• Due to more production of smaller efficient cars resulted
into less production of Muscle cars.
1) 1971 AMC Hornet SC/360.
2) 1971 Ford Mustang Boss 351.
3) 1971 Pontaic Firebird TransAm.

11. Impact of Countries.
Countries
U.S.
European
Economic
Community
Impact
1) *Emergency Highway Energy Conservation
Act
2) CAFE Standard
3) Gasoline station will not sell oil product on
Sundays.
4) *Odd-Even Rationing
Government banned flying, driving, boating on
Sundays.

12. Countries
Sweden
Netherlands
Israel
Japan
Impact
Government rationed gasoline & heating oil.
Government impose prison sentences for those
who used more than their give ration of
electricity.
*Solar Heat Water in use.
Japan industries shift from oil intensive to
Electronics.

13. History of 1979, 2nd Oil Crisis
 The 1979, second oil crisis = Doubling of Prices. It arise due to
decreased in oil output to 3 reason.
1. The fall of Shah Mohammed Government in Iran-Islamic
state under the leader of Ayatollah Khomenei.
2. The second reason was Iranian Hostage crisis from 1979 to
1981.
3. The third reason was War between Iran-Iraq, from 1980 to
1988.
 In year 1978, a strike by 37000 workers at Iran’s nationalized oil
refineries, which reduced production from 6 million barrel per
day to 1.5 barrel per day.

14.  In 1980, oil production in nearly stopped & Iraq’s oil production
was severely cut as well.
 Resulted into other OPEC exporters i.e. remaining 12 OPEC
member & Non-OPEC member expanded their production &
earned more profit.
 Soviet Union Become top world producer at that time.
(Saudi Arabia is 1st in place in oil producing Countries with 11.75
million per day.)

15. Impact of 1979, 2nd Oil Crisis.
(Doubling of Price)
1. On other-OPEC member as well as Non-OPEC member:-
 After Iran-Iraq went to war in 1980, caused 10% drop in
worldwide production.
 Non-OPEC countries like Mexico, Norway, Oman, Russia had
surpassed the OPEC production.
 Remaining 12 member of OPEC increase their production &
earn more profit with the increasing price.
2. United States:-
 Once again long lines at gas station.
 The price rose from dollar 15.85 barrel to dollar 39.5 per
barrel.

16. 3. Other oil consuming nation:-
 Because of high price in 1970’s Industrial took steps to
reduce their dependence on OPEC oil & start imports
from Non-OPEC countries.
 Some oil consuming nations switched from oil to coal,
natural gas or nuclear power.
4. Automobile:-
 During 1979 oil crisis , Japanese carmaker earned a
reputation for building, cheap, reliable, efficient cars that
suitable for new era of harness.
 Honda Accord Sedan was one of the most successful
cars of 1979.

17. Images

18. Indian Economy
Basic Information:-
 By drilling for oil, wildcut well, dry hole(unsuccessful) crude oil
can be found. Crude oil has a mixture of all type of Hydrocarbons.
 Products from Crude Oil.

19.  Famous Oil Refineries Companies in India:-
1. Indian Oil
2. Reliance
3. HP
4. Bharat Petroleum, Essar e.t.c.
 In July 2013, when the price of Indian basket of crude oil was
Rs 6170.48 a barrel, the retail price of petrol in Delhi was Rs
70.44 a litre.
 On 1st January 2017, with the price of the Indian basket of
crude oil at Rs 3599.97 a barrel, the retail price of petrol was
Rs 70.60 a litre.
 Between July 2013 and January 2017, the price of the Indian
crude oil basket fall 41.6 % , while the retail price of petrol
went up marginally.

20.  At the year 2014 when Narendra Modi-led Bhartiya Janata Party
government came to power. The government chose to retain a
portion the benefits from falling crude oil “prices by increasing
excise duty”.
 Nitin Tiwari, an analyst at Antique Stock Broking LTD, pointed
out that after 12 November 2014,
1. excise duty on petrol increased from Rs 9.72 per litre to Rs
21.10 per litre,
2. excise duty on diesel has increased from Rs 3.67 per litre to
Rs 17.33 per litre.

21. Conclusion
Because of oil crisis, different countries suffer different problems.
Some countries become less depend on oil.
Disadvantages of oil crisis:-
1. Oil is more expensive compared to other fossil fuels such as
coal or natural gases.
2. Burning oil as well as Refineries Industries can pollute the air.
3. Oil is Non-Renewable source of energy. That means that one
day we will probably run out of crude oil.
Alternatives f Crude oil i.e. Electric cars & bike, Solar
Power/Energy, Coal, Nuclear Power, Thermal Power, Wind Power.

22. Electric Cars & Bike.
1. Founded in 1983, ELECTROTHERM (I) LTD (ET) is a leading
conglomerate from Gujarat, the first company to introduce
electric Yobykes in India in 2006. It is manufactured in Kutch
District of Gujarat.
2. Tata Power installed its first electric vehicle charging station
at Tata Power receiving station at Vikhroli, Mumbai. Nano
will be next generation electric car by Tata Motors.
3. Electric cars :-
Countries
1)Japan
2)Texas
3)California
Car
Tesla Roadster
Nissan Leaf
Tesla Model S

23. Latest News regarding Crude Oil
 Dharmendra Pradhan = Minister of Petroleum & Natural Gas in
Narendra Modi led NDA Government.
His decision is to put petrol, diesel into the regime of
GST.(Decision Pending)
As he says that 3 kinds of taxes paid by consumers in petrol &
diesel.
1. Central Excise
2. VAT
3. Dealer Commission

24. Before GST
Base Price = Rs 30.70 per litre
+Excise
Duty = Rs 21.48 per litre
+Vat
(State Govt) = Rs 14.96 per litre
+Dealer
Commission= Rs 3.24 per litre
Total = Rs 70.38 per litre
After GST
(Assuming Highest rate of GST slab
28%)
Base Price = Rs 30.70 per litre
+SGST =Rs 4.3 per litre
+CGST = Rs 4.3 per litre
+Dealer
Commission = Rs 3.24 per litre
Total = Rs 42.54 per litre
Situation Regarding Implementation of GST( Information as of
13 September, 2017 of Delhi)
Dealer pay = Rs 30.70 per litre of Petrol