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India Becomes Europe’s Largest Supplier Of Refined Fuels

Context:

As per the latest data, India has become Europe’s largest supplier of refined fuels this month.

Relevance:

GS Paper-3: Indian Economy and issues relating to Planning, Mobilisation of Resources, Growth, Development and Employment.

Dimensions of the Article:

  1. Key points
  2. What Does India’s Rising Petroleum Product Exports to the EU Mean?
  3. Petroleum products: What are they?

Key points:

  • Europe’s reliance of Indian crude oil has significantly increased since the ban on Russian oil.
  • According to an analysis of data from the Directorate General of Commercial Intelligence and Statistics, India’s exports of petroleum products to the EU increased by 20.4% year over year in April to January, reaching 11.6 million tonnes (DGCIS).
  • India’s refined product exports to the region increased sequentially for five consecutive months prior to the EU’s ban on Russian petroleum products starting on February 5, reaching 1.90 million tonnes in January, the highest monthly volume in the first ten months of the current fiscal.
  • Compared to the same period last year, the EU accounted for nearly 15% of India’s 79 million tonnes of total petroleum product exports.
  • Its share of India’s petroleum product exports increased from 16 to nearly 22 percent in the four months prior to the EU’s ban on Russian refined products.

What Does India’s Rising Petroleum Product Exports to the EU Mean?

  • From the standpoint of the world’s oil markets, suppliers like India assist in preserving a demand-supply balance and averting sharp price fluctuations.
  • Countries like India, a major oil refiner, are helping to close the gap by purchasing Russian oil on the one hand and increasing the supply of refined products to the EU on the other. The EU does not want to buy crude as well as refined fuels and products from Russia.
  • India is a significant refiner, with a capacity of about 250 million tonnes per year.
  • Despite being one of the biggest consumers of crude oil, India is a net exporter of petroleum products because its refining capacity exceeds domestic demand.
  • The West’s punitive action against Russia’s oil and gas sector benefits Indian refiners, especially export-oriented private sector players Reliance Industries and Nayara Energy, because it enables them to buy Russian oil at a discount while earning robust margins on product supplies to Europe. As a result, even though the EU avoids purchasing oil and petroleum products directly from Moscow, some of it seems to be making its way to European co
  • Under the current conditions, India is now playing a more significant role in the supply map for refined products and crude oil around the world.

Petroleum products: What are they?

  • Materials derived from crude oil (petroleum) as it is processed in oil refineries are known as petroleum products.
  • Petroleum products are intricate mixtures as opposed to petrochemicals, which are a collection of clearly defined, typically pure organic compounds.
  • The vast majority of oil is transformed into petroleum products, which include a variety of fuel classes.
  • The majority of oil products, such as different types of fuel oil and gasoline, are used as “energy carriers,” or transportation fuels.
  • These fuels include gasoline, jet fuel, diesel fuel, heating oil, and heavier fuel oils, or they can be blended to produce those fuels.
  • Heavier (less volatile) fractions can also be used to create heavy oils such as lubricating, tar, paraffin wax, and asphalt.
  • Additional chemicals are produced by refineries, some of which are used in chemical reactions to create plastics and other practical materials.
  • Since sulfur-containing molecules in petroleum frequently make up a small percentage of the molecules, elemental sulphur is frequently produced as a petroleum product.
  • Hydrogen and carbon can both be produced as petroleum products in the form of petroleum coke.

-Source: The Hindu


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