Indian Oil Corporation Limited, or Iocl, is an oil and gas corporation in India, with its headquarters in New Delhi. It is the world's 119th largest public corporation in India.
With 49% share in the petroleum products market and 31% share in the refining capacity and 67% downstream sector pipelines capacity the Indian Oil Group of companies owns and operates 10 out of 22 refineries in India with a combined refining capacity of 65.7 million metric tons per year. In 2012 IOCL sold 75.66 million tons of petroleum products and reported a turnover of ₹37.54 billion, and the Government of India earned an excise duty of ₹200 billion and tax of ₹10.5 billion.
The company is mainly controlled by the Government of Indi owning approximately 58.57%
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Since the major supplier is ONGC which supplies approximately 42% of the total oil production combined in all over the world. Along with the top oil importing countries India is at 9th position with a requirement for one year around 1.5 million barrels from OPEC. So, assessing the dependence we can conclude that the supplier in oil industry enjoys more power and also have more power with regard to fixation of prices. But comparatively, the bargaining power of these suppliers has is becoming low as the purchase is happening from number suppliers. For instance Indian oil uses a method for purchasing which again is copied by other companies and vice …show more content…
Buyers need to be in the loop and should understand the market, here byers are of two types individual and also the industrial who buys from the upstream buyer like the Indian oil who tends create an artificial scarcity when the price is high so they can sell it when the price is high . This is due to the higher completion.
Existing players like the chemicals industries who can act as a substitute for the oil is also a threat for Indian oil. And the solar industry, nuclear power projects, bio gas power, coal etc. would be considered as the threats to Indian Oil. Since Oil industry requires a huge financial background and many environmental regulations to follow threat of new entrants in not an issue for Indian oil as they are already a big
Bargaining power of suppliers analyzes how much power a business 's supplier has and how much control it has over the potential to raise its prices, which, in turn, would lower a business 's profitability. (Arline, 2015).
This strong growth in its downstream can be attributed to its efforts of diversifying its business to those products that have higher margins. For instance, the company’s refining and marketing margins helped the company to increase its earnings by a whopping $4.1 billion in 2015. This was however offset by volume and mix effect that led to increased maintenance costs and reduced its earnings by $200
Exxon Mobile employs roughly 83,600 employees worldwide. The company produces approximately 3 percent of the world’s oil and about 2% of energy. Exxon Mobil had 72 billion barrels of oil equivalent reserves that are expected to last more than 14 years, the company also had 37 oil refineries in 21 countries, which collectively have a refining capacity of 3.92 million barrels per day, and this makes the corporation the largest oil manufacturer in the world.
America is dependent on other nations for their ability to create energy. The United States is the world’s largest consumer of oil at 18.49 million barrels of oil per day. And it will continue to be that way for the foreseeable future considering the next largest customer of oil only consumes about 60% of what the U.S. does. This makes the U.S. vulnerable to any instability that may arise in the energy industry. In 2011, the world’s top three oil companies were Saudi Aramco (12%), National Iranian Oil Company (5%), and China National Petroleum Corp (4%). The risk associated with these countries being the top oil producers is twofold. One, they are located half way around the world making it an expensive to transport the product logistically to a desired destination. And two, the U.S. has weak, if not contentious,...
In 2004, crude oil producers around the world expected a 1.5% growth in the world’s demand for crude oil. The actual growth rate was more than double the projections at 3.3%. This growth was due to rapidly industrializing of foreign countries such as, China and India. Therefore the lack of crude oil affected the supply of gasoline to consumers at the pump.
"United States Oil - Exports - Economy." Index Mundi - Country Facts. Web. 26 May 2011. .
Oil is a significant, non renewable resource that is found underground and extracted through technological processes (Grubb). Consumption rates of the substance have never been higher. Oil remains to this day a vital aspect of production in industries like plastics, fertilizers, and asphalt. World oil consumption presently rests around 83 million barrels per day (...
ExxonMobil is a multinational oil and gas company with its headquarters offices in Irving, Texas. It was formed in 1999 through a definitive agreement between Exxon Corporation and Mobil Oil Corporation to merge and create a new company. In essence, the corporation produces, distributes and sells oil and natural gas across the world. The structure and culture help it survive the price burst which often occurs in the global oil market. Notably, among its largest competitors, ExxonMobil generates high revenue and produces large volumes of oil for every penny it spends. Besides, the company publicizes the highest price of natural gas and oil, both in absolute terms and for every employee it hires. Significantly, even in good years, the top managers
Pacific Oil Company The Pacific Oil Company is going through renegotiation. The company grew immensely early in its inception. The Pacific Oil Company is a “producer of industrial petrochemicals” (Lewicki, Saunders, & Barry, 2010). In 1979, the Pacific Oil Company established a contract with the Reliant Corporation. Pacific Oil Company purchased “vinyl chloride monomer” (VCM) from the Reliant Corporation.
The Political, Social, and Legal Environment of Business. Case Study Analysis: Union Carbide Corporation and Bhopal. A single slip in action may cause lasting sorrow. A slight mistake in operation at a Union Carbide pesticide plant in Bhopal, India, caused a lot of deaths and injuries. What a tragedy it is.
The U.S dependency on foreign oil presents many negative impacts on the nation’s economy. The cost for crude oil represents about 36% of the U.S balance of payment deficit. (Wright, R. T., & Boorse, D. F. 2011). This does not affect directly the price of gas being paid by consumers, but the money paid circulates in the country’s economy and affects areas such as; the job market and production facilities. (Wright, R. T., & Boorse, D. F. 2011). In addition to the rise in prices, another negative aspect of the U.S dependency on foreign crude oil is the risk of supply disruptions caused by political instability of the Middle East. According to Rebecca Lefton and Daniel J. Weiss in the Article “Oil Dependence Is a Dangerous Habit” in 2010, the U.S imported 4 million barrels of oil a day or 1.5 billion barrels per year from “dangerous or unstable” countries. The prices in which these barrels are being purchased at are still very high, and often lead to conflict between the U.S and Middle Eastern countries. Lefton and Weiss also add that the U.S reliance on oil from countries ...
The oil companies are using a structured power approach while addressing the land use issues with the locals. The oil companies use formal authority, legal prerogative, and association to strengthen their side of the conflict. The Nigerian government has a history of being influenced by foreign money and influence, which gives big business a huge advantage over monetary decisions. The Nigerian government has gone as far as creating laws and legislation to benefit the oil companies because of the significant economic contributions the companies bring to the country. Omeje (2005) states “Oil is the mainstay of Nigeria’s economy and the state is largely dependent on oil rents, taxes and royalties paid by transnational oil companies (TNOCs) and on profits from its equity stakes in the TNOCs’ investments.”
The industry is divided into three distinct sectors including the upstream, midstream and downstream sectors. The upstream sector includes the exploration and production of crude oil as well as the exploration and production of natural gas. This sector has experienced the largest amount of deals in terms of mergers and acquisitions, which will be further discuss in section III. The midstream sector involves the transportation of extracted petroleum from the upstream sector through pipelines, rail, barge, truck as well as storage. Finally, the downstream sector connects the end consumers through derived products such as gasoline, liquefied natural gas (LPG), liquefied natural gas (LNG), kerosene (aircrafts), and diesel…
Agreeing with other industry members what price to charge is known as collusion. Collusion is defined as “Action in concert without any formal agreement… [it] is common when anti-monopoly legislation makes explicit agreements illegal or unenforceable. Its existence is [sometimes] extremely difficult to prove” Black et al (2012). Within this analysis, I will explain what collusion is, the different types, why firms may enter into this agreement, then outline a past example and finally explain why this silent or spoken agreement may break down. Collusive agreements or cartels may however be created by governments to protect and positively influence markets, examples of this are the US sugar manufacturing cartel (operating between 1934-74) and OPEC which is still in operation today.
In conclusion, OPEC's monopoly of the petroleum industry has been a strong one since the 1960's since its members enjoy economies of scale. Its decisions concerning the output of petrol have always been strong affecting the rest of the world. This monopoly is socially inefficient due to the output and the deadweight loss that results. Interestingly enough, to break this monopoly, the new Iraq has the potential to turn the market power around.