2. Introduction
Importance
Legal aspects
Major deposit in world
economics of oil market
Indian economics of oil
Fuel tax breakdown
Tax rates in india
Oil crisis
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3. Oil industry is considered to be the backbone
of economy because it is main source of energy
till date.
Oil is one of the most economically mature
commodity market in the world.
The main volume of products of the oil
industry are fuel oil and gasoline (Petroleum)
India is among the top three oil consuming
nations along with America and China
respectively.
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4. Oil is very important because it is the single
biggest source of primary energy, it accounts for
about a third of all energy used by humans.
Oil and gold have been proven to be the turning
points for economic situations in countries.
Oil demand in India rose 10.3% in the first month
of 2018,the fourth straight monthly gain .
The international Energy agency sees India to be
the center of global oil demand till 2030.
The vehicle sales are expected to be increase by 9%
in the year ending march.
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5. 5
•Upstream finds and produces crude oil and
natural gas .Exploration and production
sector(E&P)
•Midstreamprocesses,stores ,markets and transport
commodities .
•Downstreamincludes oil refineries,petrochemical
plants ,petroleum products,distributors,retail
outlets,and natural gas distribution companies.
8. Oil is an exhaustible resource : it will
eventually run out.
As such ,as it becomes increasingly scarce the
price of oil is likely to increase overtime
relative to the prices of other goods and
services.
Oil demand & supply curves are steep: i.e. they
are very price inelastic.. Demand because there
are relatively few substitutes for oil.
Oil flows from east to west most obviously oil
is produced in middle east & flows to Europe
& America.
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9. It is an excise tax imposed on the sale of
fuel
Imposed on fuel which are intended for
transportation .
Fuel tax receipts are often dedicated or
hypothecated to transportation projects
It is also used as an Eco Tax to promote
ecologically Sustainability .
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11. The pricing of fuel varies by state through
central taxes still are part of the pump price of
the fuel.
The central govt. has different taxes of about-
24-26% of the final cost .
For example:- In Bengaluru Karnataka May 16
2011 price was Rs.71.09/liter Out of this Rs.
17.06 goes to govt. of India in the form of excise
and custom tax. Rs.16.63 is collected by state
govt. in the form of sales tax and entry tax.
Total of Rs. 33.69 is collected from taxes.
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12. Demand and Supply:-The consumption side
consists of hundreds of millions of us, who
individually have limited power to influence
prices, but collectively have plenty.
Market Sentiment:-Another highly variating
entity in states with unstable socio-political
standing.
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13. The oil prices are combination of cyclic,
volatile, unpredictable and irrational events.
The high variation in oil prices can link to
peculiar socio-economic scenarios.
The support given by other countries to a
country like Venezuela tells a lot about how oil
economics intervene strategic relations of
countries.
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14. Since 1960, after establishment of
OPEC(Organization of Petroleum exporting
countries). The oil pricing is majorly at their
disposal.
After 1974, economists are predicting another oil
crisis.
Changed position of Saudi Arabia is going to play
a key role in it.
The political unrest In Venezuela is also adding up
to it.
It would be interesting to see the affects and
observe the implication of such phenomenon, even
economists are looking at it as a big event.
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