In 2014, Indian Oil Corporation surprised everyone by entering the Fortune Global 100 list—the first Indian company to do so. Those were the days of high oil prices and the state-promoted oil marketing company broke all barriers. Indian Oil enjoys the country’s largest customer interfaces, thanks to its network of more than 26,500 fuel outlets with a footfall of over 15 million every day and sale of 2 million LPG cylinders daily. The company also dominates the refining industry, owning 11 of the 23 refineries in India and refining 80 million tonnes of crude oil per annum.
Indian Oil has its origins in the Nehruvian era, when Jawaharlal Nehru envisaged a role for the public sector in the refining and distribution of petroleum products. Two PSUs, Indian Refineries Limited and Indian Oil Company, were established in 1958 and 1959 respectively. The first refinery was set up in Guwahati in 1962 with a capacity of 0.75 million tonnes per annum. In 1964, Indian Refineries Limited and Indian Oil Company merged to form Indian Oil Corporation.
Indian Oil, though, faces a huge challenge in the years to come. In the next three years, the company needs to invest Rs 60,000 crore to upgrade to BS-VI standard fuel. Also, by 2030, the government is keen on selling only cars running on electricity. By then, most trains in the country would already be running on electricity. That would mean fewer takers for oil and a question mark on the future of oil companies.
While the merger of Oil and Natural Gas Corporation and Hindustan Petroleum takes shape, the government is already working on a similar arrangement for Indian Oil and GAIL. By 2030, the major business for this new entity might come from gas distribution and not oil.