Political factors Crude oil is one of the most necessitated worldwide required commodity.

Anyslightest fluctuation in crude oil prices can have both direct and indirect influenceon the economy of the countries. The volatility of crude oil prices drove manycompanies away. Therefore, prices have been regularly and closely monitored byeconomists. Now a days prices have shoot up to record levels of USD 125 per bbl.This is an increase of nearly 70% from that of the previous year. The consumptionlevel of oil is projected to be rise by 1.2 million bbl/d in the year 2008. Theconsumption of China is presumed to be rise by 0.4 million bbl/d in current year,as it has already registered an increase of 0.8 million bbl/d in march.Crude oil prices act like any other product cost with more variation taken placeduring shortage and excess supply. Studies have conducted to analyze the impactof rise in crude oil price to the economic growth in the OPEC (Organization of Petroleum Exporting Countries) countries. It has been observed that $10 in theAdditionally, factors that are more likely to change in the future or morerelevant to a given company will carry greater importance. For example, acompany who has borrowed heavily will need to focus more on theeconomic factors (especially interest rates).

Furthermore, conglomerate companies who produce a wide range of products (such as Sony, Disney, or BP) may find it more useful to analyzeone department of its company at a time with the PESTEL model, thusfocusing on the specific factors relevant to that one department. A company rude oil price means decrease in the economic growth of the OPEC countries by0.5%. This rise in prices account to have more influence on the economiccondition of developing countries.Any massive increase or decrease in crude oil has its impact on the condition of stock markets in throughout the world. The stock exchanges of every country keepa close eye on any up and downward movement of the crude oil price. India fulfillsits major crude oil requirements by importing it from oil producing nations. Indiameets more than 80% of its requirement by importing process. Therefore, anyupward and downward motion of prices are closely tracked in the domesticmarketplace. Many times it has been recorded that prices of essential products likecrude also acts as a prime driver in becoming reason of up and down movement of price.Keeping in view the conditional status of present scenario, most of the observers atthe international arena is much more interested in knowing the current oil price andthe outcome of this price burst. These has become a hot bound question in all over world. There tend to be exist two schools of thought. One side argues that high prices are cyclical and arise due to the coincidence occurrence of potentiallyreversible factors which all are going in the same direction. But the other school of thoughts opine that there is a fundamental structural change in the oil marketwhich is pointing towards the shortage of investment from a decade. Both thethoughts are important. As if the prices are cyclic in nature, there result will notexist forever but if they are structural then they will tend to be stay for a longer time period.Any fluctuation in crude oil affects the other industrial segments also. Higher crude oil price implies to the higher price of energy, which in turns negativelyaffects other trading practices that are directly or indirectly depends on it. CrudeOil has been traded in throughout the world and there prices are behaving like anyother commodity as swinging more during shortage and excessiveness.In the short term, price of

crude oil is influenced by many factors like socio and political events, status of financial markets, whereas from medium to long run it isinfluenced by the fundamentals of demand and supply which thus results into self price correction mechanism.This sustained movement in the northern side underlines some of the fundamentalchanges in the marketplace. On the demand supply, where in the past the more andmore consumption was come from the OPEC countries, especially the US but in oday's date much of the incremental demand flow is from emerging economies.Particularly China and India which have recorded more than 40% contribution inthe incremental global consumption during the time period of 200006.International price of crude oil is projected to shoot up to 100 million barrels per day by 2015.While demand may touch to a great height, supply will juggle to keep up the pace.The production from existing sources has been reduced by 4% per annum, whichimplies that around 3 million barrels per day of new capacity is required to beadded in every year for offsetting this declination.There are innumerable factors which influence the price movement of crude oil inthroughout the world. Like methods and technology using for increase the oil production, storing up of crude oil by rich and prosperous countries, changesintroduced in tax policy, social and political issues etc. In recent years manyfactors have emerged as the key figures in influencing the price index of crude oilin throughout the world. The crude oil prices have been buffeted by many factors, which aresummarized as below Production: The OPEC nations are the major producer of world's crude oil.Therefore, every policy made by such countries related to the crude oil prices have their influence on crude oil prices. Any decision taken by OPECnations for increasing or decreasing production of crude oil impacts the pricelevel of crude oil in international commodity markets. Natural Causes: In recent years, global community have witnessed manyevents which in turns have volatility effects on the price level of crude oil.Like hurricane katrina and other type of tropical cyclone have hit the major portion of globe, which as a result driven the crude oil prices to reach at its peak. Inventory: In throughout the world, oil producers and consumers get stock their crude oil for their future requirements. This gives rise to speculation on price expectations and sale/arbitrage chances in case any unexpected thingcracks during supply and demand equations. Any upward or downwardmovement in inventory level shoots up volatility in price index of crude oil,which generates lot of changing movement in sensex. Demand: With a sharp rise in economic demand, requirement of crude oil isincreasing to manifold in context to the limited supply. The high demandeconomies of crude oil is putting undue pressure on the available fixed The price structure of crude oil is also influenced by the cyclical pattern. It has been observed that requirement of crude oil got increased during summer season incomparative to the winter season. As any dip in the seasonal temperature increasesthe consumption of energy for heating purpose in many cold nations. Demandshoots up and thus generates the requirement

of tapping the inventories. Similarly,in summer, supply exceeds the demand and petroleum inventories are build up for storage purpose. Henceforth, crude oil prices drop. Economic factors paper is about the Indian petroleum refining industry. But this industry isextremely open; trade flows are large compared to production. And there isconsiderable overlap between oil production and refining internationally, and tosome extent in India. So we begin with a brief discussion of the international petroleum industry and its components refining being one of them.Petroleum is extracted from underground reserves; then it is cracked or refinedinto end products for various uses. The petroleum industry thus has two parts: anoil exploration and production industry upstream and a refinery industrydownstream. Most oil producers also own refineries. But the reverse is not true; ahigh proportion of oil is sold to refinery companies that do not produce crude oil.Sedimentary rocks in which hydrocarbons are trapped often hold gas, sometimes inassociation with crude oil and sometimes alone. It consists mostly of methane,which is lighter than air and toxic. It therefore requires airtight tanks for storageand similarly leak-proof pipes or trucks for transport, which raise its capital costs.Associated gas was flared in early years of the industry; it is still flared at remoteor minor wells where the cost of its collection and transport would be high, or often reinjected into the oilfield to maintain pressure which forces oil up to thesurface. But where the quantities are large enough, natural gas is mined and traded.It is mainly used as an industrial, domestic and vehicular fuel.Motor vehicles run almost exclusively on petrol and high-speed diesel oil, bothfuels derived from mineral oil although they can be modified to run on certain biofuels. Vehicles are so widely dispersed that they require an extensivedistribution system for these two refinery products. As motor vehicle use hasspread across the world, it has brought along with it petrol pumps, logistics, torage and supply of fuels. There is thus a third part of the petroleum industrydownstream from refineries which distributes the products. It is owned byrefineries in most countries. But this is not inevitable. Some countries havedistribution chains that are independent of producers and refiners; and in countrieswhich do not have refineries, distribution is undertaken by either local or foreignoil companies.Oil has collected in pools and seeps for thousands of years. The Chinese arerecorded as having extracted oil from wells 800 feet deep through bamboo pipes in347; they used it to evaporate brine and make salt. American Indians used to put itto medicinal uses. Persians, Macedonians and Egyptians used tars to waterproof ships. Babylonians used asphalt in the eighth century to construct the citys walls,towers and roads. But the easily available oil was not put to any mass use becausethe crude itself was not a good fuel; it gave out much soot and smoke. Adistillation process using a retort was invented by Rhazes (Muhammad ibnZakariya Razi) in Persia in the 9th century; liquid heated in it vapourized, passedthrough a curved spout and condensed in another container. The process could beused to make kerosene; but it was more often used to make alcohol and essence of flowers for perfume. It was a batch process, its fuel consumption was high, and itwas not equally efficient at distilling kerosene from all crudes.A more efficient and reliable distillation process came out of a series of inventionsafter 1846. The last invention was the invention of oil fractionation in 1854 byBenjamin Silliman, a professor of science in Yale. It used a vertical column whichseparated components more efficiently, and which could be used continuously.Oil was first produced in Titusville, Pennsylvania (USA) in 1859 by one Edwin

LDrake, who refined it into kerosene, which was then used as an illuminant.Electricity did not emerge as an illuminant till the Edison Electric Light Companywas founded in 1878. Well into the 20th century, kerosene, gas and electricitycontinued to compete as illuminants. Whilst the use of gas as an illuminant hasvirtually disappeared, a large population, especially in India, continues to usekerosene as illuminant.The invention of the motor car by Karl Friedrich Benz in 1885 created a market for petrol, a new refined product (petrol is called Benzin in Germany, but is not namedafter Karl Benz). In 1898, Rudolf Diesel invented an engine in which oil wasignited by compression; the diesel engine he invented came to power larger vehicles, principally trucks and buses. Diesel engines used a different fuel, whichwas named diesel oil. After this, the production and use of motor vehicles spreadrapidly in the United States, especially after 1908 when Henry Ford began massmanufacture of his Model T; and petroleum and diesel oil became the mostimportant refined products, first in the US and progressively across the world However, only a certain proportion of crude oil can be converted into motor fuels.The demand for kerosene, the original distillate extracted from crude oil, has gonedown with the spread of electricity. So other refined products have beendeveloped, and non-vehicular uses developed for them. Some of the products differ little from motor fuels; for instance, naphtha, extensively used to make nitrogenousfertilizers and chemicals, is little different from petrol; and jet fuel is very similar to kerosene. Thus, refineries find markets for their products in many industriesother than motor transport .The Industry in IndiaIndia imports three-quarters of the crude it refines. It exports refinery products ; itsnet exports are roughly ten per cent of production. The government operates anelaborate set of cross-subsidies to insulate domestic from international prices; suchcrosssubsidies have serious effects on the finances of the Indian companiesinvolved, and influence competition amongst them. The oil companies, both publicand private, are so large a part of the economy that the cross-subsidy regimecannot be sustained in all circumstances; sooner or later, the government has to bring domestic prices closer to international prices. Hence the state of competitionin the international market and international prices are important for the domesticmarket.I give an introduction to refinery technology, products, and the markets they serve.In ,briefly describe the global exploration, production and refining industries. In,we describe the Indian market structure in terms of the companies operating in it,their products and markets. In outline the market structure in exploration and production, user industries, refining and gas respectively. In, turn to the major barriers to competition and to the steps that need to be taken if greater Indias economic growth is contingent upon the growth of the Indian steelindustry. Consumption of steel is taken to be an indicator of economicdevelopment. While steel continues to have a stronghold in traditional sectors suchas construction, housing and ground transportation, special steels are increasinglyused in engineering industries such as power generation, petrochemicals andfertilisers. India occupies a central position on the global steel map, with theestablishment of new state-of-the-art steel mills, acquisition of global scalecapacities by players, continuous modernisation and upgradation of older plants,improving energy efficiency and backward integration into global raw materialsources.Steel production in India has increased by a compounded annual growth rate(CAGR) of 8 percent over the period 2002-03 to 2006-07. Going forward, growthin India is projected to be higher than the world average, as the per capitaconsumption of steel in India, at around 46 kg, is well below the world average 150 kg) and that of developed

countries (400 kg). Indian demand is projected torise to 200 million tonnes by 2015. Given the strong demand scenario, most globalsteel players are into a massive capacity expansion mode, either through brownfield or greenfield route. By 2012, the steel production capacity in India isexpected to touch 124 million tonnes and 275 million tonnes by 2020. Whilegreenfield projects are slated to add 28.7 million tonnes, brownfield expansions areestimated to add 40.5 million tonnes to the existing capacity of 55 million tonnes.Steel is manufactured as a globally tradable product with no major trade barriersacross national boundaries to be seen currently. There is also no inherent resourcerelated constraints which may significantly affect production of the same or itscapacity creation to respond to demand increases in the global market. Even thegovernment policy restrictions have been negligible worldwide and even if thereare any the same to respond to specific conditions in the market and have always been temporary. Therefore, the industry in general and at a global level is unlikelyto throw up substantive competition issues in any national policy framework.Further, there are no natural monopoly characteristics in steel. Therefore, one maynot expect complex competition issues as those witnessed in industries liketelecom, electricity, natural gas, oil, etc.This, however, does not mean that there is no relevant or serious competition issuein the steel industry. The growing consolidation in the steel industry worldwidethrough mergers and acquisitions has already thrown up several significantconcerns. The fact that internationally steel has always been an oligopolisticindustry, sometimes has raised concerns about the anticompetitive behavious of large firms that dominate this industry. On the other hand the set of large firms thatcharacterize the industry has been changing over time.Trade and other government policies have significant bearing on competitionissues. Matters of subsidies, nontariff barriers to trade, discriminatory customsduty (on exports and imports) etc. may bring in significant distortions in thedomestic market and in the process alter the competitive positioning of individual players in the market. The specific role of the state in creating market distortionand thereby the competitive conditions in the market is a well-known issue in thiscountry.This report proceeds as follows.Section 2 of the report provides a brief over view of the performance and structureof the Indian steel industry by analysing published secondary time series data oncertain key indicators. Market structure is analyzed using indicators such asnumber of players and their respective shares in total production, share of publicand private players in the total production/sales, production capacity of major players, etc. Given the heterogeneous nature of the product this analysis is done for the various segments of steel that constitute the relevant market. This analysis isa precursor in identifying segments where competition may be an issue of concernto allow for a pointed analysis. The report documents policy and institutionalstructure governing the steel industry in India and the role played by theGovernment in the development of this industry.The report examines issues of competition of steel industry in India, by identifyingthe structurally inherent and the market determined positions of various steel firmsspecifically to see their market power, vis--vis both their final consumers as alsothose within the steel industry. The issues emerging out of the size and marketshares, specifically taking into consideration the investment aspects are alsodiscussed in this section. The other issue of significant importance in the context of competition is the command over natural resources that a few players possess andthat enable a significant cost advantage over the rest in the market. These are theresult of government policies of the past, to support growth of a particular industry.These

preferential policies and their impact on competition are also analysed inthis section.Concludes with a discussion on state of the competition in the Indian steel sector pointing to a few key recommendations for the Competition Commission of India.Provide data on the sector, and briefly discuss international conditions, and provide an historical overview.In Brief This study finds little evidence of any cartelization or joint pricing behaviour onthe part of the incumbents. It finds that government intervention, and slowresponsiveness to changing conditions has contributed to shortages in the past,which in turn leads to action by the incumbents that look like, but is not, anti-competitive behaviour. Unequal access to raw material, as well as export/importcurbs, are the key issues affecting the creation of a level playing field. It is the lasttwo as well as ready availability of information on costs and prices across the value Technological effects Timely, hands-on guide to environmental issues and regulatory standards for the petroleum industryEnvironmental analysis and testing methods are an integral part of any current andfuture refining activities. Today's petroleum refining industry must be prepared tomeet a growing number of challenges, both environmental and regulatory.Environmental Analysis and Technology for the Refining Industry focuses on the analytical issues inherent in any environmental monitoring or cleanup program asthey apply to today's petroleum industry, not only during the refining process, butalso during recovery operations, transport, storage, and utilization. Designed tohelp today's industry professionals identify test methods for monitoring andcleanup of petroleum-based pollutants, the book provides examples of theapplication of environmental regulations to petroleum refining and petroleum products, as well as current and proposed methods for the mitigation of environmental effects and waste management. petroleum technology, refining, and products, and reviews the nomenclature used by refiners, environmental scientists, and engineers. environmental technology andanalysis, and provides information on environmental regulation and the impact of refining.Coverage includes:* In-depth descriptions of analyses related to gaseous emissions, liquid effluents,and solid waste* A checklist of relevant environmental regulations* Numerous real-world examples of the application of environmental regulationsto petroleum refining and petroleum products* An analysis of current and proposed methods of environmental protection andwaste managementEfficient reliable and competitively priced energy supplies are prerequisite for accelerating economic growth. India is currently worlds fifth largest consumer of energy accounting for 3.9% of worlds annual energy consumption. USA, China,Russian federation and Japan are the top four consumers. Indias importdependence on crude oil and petroleum products is more than 70%. Realization of high economic growth aspirations by the country in the coming decades, calls for rapid development of energy market.The India Hydrocarbon Vision-2025 report, which encapsulates Governmentslong-term policy for this sector enunciate therein the longterm policy coveringexploration, refining, marketing infrastructure, gas and all other related matters inthe hydrocarbon sector. The national endeavor is to bridge the ever-increasing gap between demand and supply of petroleum products in India by intensifyingexploratory efforts for oil and gas in the Indian sedimentary basins and abroadsupported by other alternative sources of energy like Coal Bed Methane (CBM),Gas Hydrates, Coal Liquefaction, Ethanol and Bio-diesel etc. Social effects The carrying capacity is the number of individuals that an area can support withoutsustaining damage. Carrying capacity is exceeded if so many individuals use anarea that their activities cause deterioration in the very systems that support them.Exceeding the carrying capacity

sometimes harms an environment so severely thatthe new number who can be supported is smaller than the original equilibrium population. The carrying capacity would then have declined, perhaps permanently.Any number of elements or systems can be hurt by overuse. A field can be grazeddown until the root systems of grasses are damaged; or so much game can behunted off that food species are effectively extirpated. Now, the foragers that atethe grass or the predators that killed the game have lost a food source. In effect, thecarrying capacity has been exceeded so that the population dependent on the area's productive systems is worse off than it was originally. Animal populations that destroy their niche come and go. If not too manyexamples come to mind, it is because they rather quickly go. The miniature ponieson Assateague Island illustrate a point on the continuum. They would overgrazetheir island, seriously depleting their future food supply, except for the fact that a portion of each year's colt crop is removed. Without human intervention (there areno predators and apparently no reservoir of infectious disease), the pony population would explode. Probably it happened in the past. Their very small sizetoday is a vestigial effect of starvation, when only the tiniest, for whom the least blades of grass were lifesaving, survived.A population cannot be stable if, by its size or behavior, it destroys the very life-support systems on which it depends. Sooner or later, degradation of theenvironment is felt in inadequacies of the food or water supply, shelter, or havenswhere individuals can be safe and the young can develop. Sustainability requireshuman or animal populations to stay at or below the carrying capacity of their physical environment. PHYSICAL AND CULTURAL CARRYING CAPACITY Humans are a little different because of wanting more than bare subsistence.Humans value their aesthetic, intellectual, cultural, and political creations. Peoplewant more than a loaf of bread and processed grape juice. For humans, then,carrying capacity refers to the number who can be supported without degrading the physical, ecological, cultural, and social environments. Carrying capacity relates tothe desired quality of life.The carrying capacity of the United States depends upon standard-of-living targets,including high-quality recreational opportunities, coexistence with an abundanceand diversity of wild species, tolerable work-tohome commuting conditions,favorable conditions for childrearing, and safe neighborhoods. Where populationsize detracts from the capacity to provide these amenities, overpopulation exists. RECOGNIZING STRESS One may discern overpopulation quite apart from large systems and specificresources. Overpopulation shows up in quality of life and cost of living.Repeatedly one sees least those who wish to, will see that more people mean more problems from pollution, crowding, and resource scarcity because evenconservationists pollute and consume. The costs of adjusting (i.e., decentlyaccommodating more and more people in the same amount of space and with the