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Are Indian Oil Companies Putting Their Heads in the Sand to Ignore the EV Revolution

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India has a large public sector owned corporate sector which is dominated by oil companies such as IOCL, BPCL, HPCL, ONGC, etc. These are multi-billion dollar companies which are spread across the oil and gas value chain. They own a massive asset base and play a key role in the energy infrastructure of the country. However, like other government owned companies they are slow moving and bureaucratic who find it hard to play in competitive sectors. While the size of these companies makes them relatively immune from cyclical forces, they are very suspectible to structural changes.

This has already been seen in multiple other industries such as telecom where companies like BSNL, which had a huge market value are now finding it hard to pay salaries to their staff. Hobbled by government interference, a huge employee base and little in terms of innovation, they are highly vulnerable to disruptive change. BHEL which used to be a capital equipment giant is finding it hard to reinvent itself after the thermal power industry has gone into a major structural decline. With orders for its boilers and generators declining, BHEL’s stock price has continued to go down with little hope for succor. Coal India which is a virtual monopoly in the coal mining sector is another company whose future is cloudy, given that renewables are cheaper than coal power and thermal capacity is hardly increasing in India.

India’s oil companies have come out with plans to adapt to the Electric Vehicle industry but these plans are yet to be implemented. With the use of electric chargers for charging EVs, the thousands of downstream refilling stations of these companies will become redundant in the coming days. Their huge refineries will also have to change from refining crude oil to petrol and diesel, they will have to move to petrochemicals. These companies may find this very hard as the petrochemicals are highly competitive and they may find themselves driven out by private giants such as Reliance and Nayara. Their downstream investments and revenues will also see a major hit in the coming days. Their top management has their head in the sand and is not worried too much. It is pretty much the same story of what happened in telecom and capital equipment. Unless the government quickly privatizes and gets out of these companies, Indian taxpayers will see a huge hit in the coming days.

M K Surana, the chairman and managing director of Hindustan Petroleum Corporation Ltd (HPCL), said electric vehicles will not be a threat to the oil industry “at least for the next ten years” as it will snatch away only a part of the “incremental demand” and “not disrupt the existing demand”.

“The main concern now (with the push for EVs) is that, is it the end game for the oil industry; we do not believe that. Does it mean that it is business as usual; the answer is no,” Surana said at a media conference on Wednesday.

Source: Hindu Business Line


Sneha Shah

I am Sneha, the Editor-in-chief for the Blog. We would be glad to receive suggestions, inputs & comments on GWI from you guys to keep it going! You can contact me for consultancy/trade inquires by writing an email to

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