1. Presented by,
Akshay Jari
Suvigya Lal
Nidhish Jain

2.  Petroleum products are useful materials derived from
crude oil as it is processed in refineries.
 It is estimated that world consumes around 88 million
barrels of each day.
 Petroleum is derived from two words:
 Petra which means rock
 Oleum which means Oil in Latin

3.  India consumes petroleum products of 4 lakh crores
per annum.
 Growth of petroleum products was at 2.6% per annum
in the Xth plan (2002-07) when the economy is
growing at 8% per annum.
 Projected growth rate of India is about 2.4% per
annum till 2030.

4.  Transport (Petrol, Diesel, CNG, Aviation Fuel) : 51%
 Industry (Petrol, Diesel, Fuel Oil, Naphtha, Natural
Gas): 14%
 Commercial & Others : 13%
 Domestic (LPG & Kerosene): 18%
 Agriculture (Diesel): 4%

5.  United States 1,91,50,000
 China 94,00,000
 Japan 44,52,000
 India 31,82,000

6.  Increase in Oil price leads to transfer of Income from
importing country to the exporting country.
 Decrease in oil prices leads to be positive for importing
countries and negative for exporting countries.
 Impact of Oil price increase for exporter country:
 Directly increases the real national income through
higher export earnings.

7.  Impact on Oil importer country:
 Direct effect on Income losses from hike in price of
petroleum products.
 Impact at the micro level:
 Increase in price of petrol diesel.
 Increase in price of LPG
 Increased prices leaves the household to spend less money on
other goods and services.

8.  Increase in Inflation:
 Directly affect the prices of goods made with petroleum
products.
 Indirectly affect the costs of
Transportation, Manufacturing and Energy production
etc.
 Increase in these costs has direct affect on variety of
goods as producers pass their costs incurred on
consumers.

9.  Increase in Oil prices can depress the supply of other
goods as they increase the cost of producing them.
 Increase in oil prices also affects the demand of goods
because people are left with less money to spend on
other goods.

10.  Higher production costs.
 Lower Income for the companies.
 Higher subsidies provided to them by government.
 Increase in price of petroleum products.

11.  India’s subsidy billed zoomed to 2.16 trillion or 2.5% of
GDP.
 It was because of two reasons:
 High crude oil prices.
 Fertilizers subsidy primarily on account of imported non
urea fertilizers.

13.  If crude oil price goes up or down Inflation moves in
the same direction.
 If crude oil prices increases it directly affects the
inflation rate, for eg. When the prices of crude oil went
to the high of more than $100 per barrel it also affected
the inflation which was around 12.28% which was
highest in past two decades.

14.  When oil prices increases it affects the following:
 Inflation Increases.
 Government subsidy bill increases.
 Foreign currency reserve reduce.
 Exports become weaker.
 Investment decreases.
 GDP is affected negatively.