Oil & gas: Budget 2017-18 wish list

Industry size

Third largest consumer of crude oil and petroleum products in the world and second largest refiner in Asia. FDI inflows into the sector totalled $6.7 billion in FY16

Oil & gas: Budget 2017-18 wish listEmployment figures

1. Total manpower employed in oil and gas sector CPSEs at 110,675 (as on March 31, 2016) has been almost stagnant over the years

2. Exploration & production vertical accounted for the highest manpower deployment (30%) followed by marketing (28%) and refinery (23%) as on March 31, 2016

3. Executive/Managerial categories employed the highest proportion of manpower (54%) followed by Workmen (31%), Supervisory (9%) and Clerical (6%) accounted for the balance during 2015-16

4. ONGC and IOCL in 2015-16 together accounted for about 60% of the total manpower employed in the oil & gas CPSEs

Oil & gas: Budget 2017-18 wish listGDP contribution

The natural gas and petroleum sector, which is inclusive of refining, transportation, and marketing of these products, contributes about 15% to India’s GDP

Oil & gas: Budget 2017-18 wish listKey issues or areas of concern for the sector

a) While Hybrid Annuity Model (HAM) under PPP has brought back the interest of private sector developers to some extent, financial closure of many projects are delayed due to lack of experience and lack of strong Balance Sheet of some players in Indian highways PPP sector. The procurement process needs to be strengthened

b) While some stalled projects are restarted, stress on current loan outstanding to highway sector continues to remain. As a result, banks are cautious in lending fresh loan to the developers

c) Despite efforts made to encourage Insurance and Pension Fund to finance roads & highways sector, these institutions have not been able to step up financing to this sector. It would be important to bring these ideal financiers into financing stream for roads and highways Oil & gas: Budget 2017-18 wish listIndustry ask

a) The amount stuck in arbitration award (in favour of developer) should be released without further delay to ease the stress on the sector

b) An Independent Regulator is required for this sector to deal with unanticipated issues arising during the long concession period.

Oil & gas: Budget 2017-18 wish list

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