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FAQ

CRUDE OIL

Q1. How much indigenous crude oil is produced in the country?

Ans. Crude oil production including condensate in the country during the year 2017-18 is 35.7 Million Metric Tonnes (MMT).

 

Q2. How many days of crude oil reserves have been planned for India?

Ans. The Integrated Energy Policy (2006) recommended that reserves equivalent to 90 days of oil imports should be maintained for strategic-cum-buffer stock purposes and/or buy options for emergency supplies from large storages available in the neighboring countries. The Government through Indian Strategic Petroleum Reserves Limited (ISPRL) has constructed three reserves at Visakhapatnam, Mangalore and Padur with a combined capacity of 5.33 million metric tons (MMT) in phase-I. While the caverns at Visakhapatnam and Mangalore are operational, Padur is yet to be commissioned.

REFINERY & REFINING

Q1: How many oil refineries are there and what is the total refining capacity of the country?

Ans. There are total 23 refineries in the country out of which Public Sector Undertakings (PSUs) -18 numbers, Joint Ventures (JVs)-2 numbers and Private Sector-3 numbers. Refining capacity in the country as on 01.07.2018 is 247.6 Million Metric Tonnes Per Annum (MMTPA).

 

LIQUEFIED PETROLEUM GASES (LPG)

Q1. Why LPG is sold in cylinders of different colours?

Ans. LPG is sold for both domestic and commercial purposes. LPG sold for domestic purpose is subsidized by the Government whereas LPG sold for commercial purpose is sold at market determined price. In order to prevent misuse of subsidized domestic LPG for commercial purpose, the two types of cylinders are coloured differently. For easy identification, cylinders used for domestic use are painted with Signal Red colour and cylinders used for commercial use are painted with Oxford Blue colour.

Q2. Can there be more than one LPG connection in a Household?

Ans. No. As per The Liquefied Petroleum Gas (Regulation of Supply and Distribution) Order 2000, issued under The Essential Commodities Act, 1955, a household cannot have more than one LPG connection issued by any of the Public Sector Oil Marketing Company/Companies. For details, LPG Control Order, 2000 may be referred.

Q3. What is meant by Household for the purpose of getting an LPG connection?

Ans. For the purpose of getting an LPG connection from a Public Sector Oil Marketing Company, "household" has been defined in The Liquefied Petroleum Gas (Regulation of Supply and Distribution) Order 2000 as under:
"Household" means a family consisting of husband, wife, unmarried children and dependent parents living together in a dwelling unit having common kitchen. Provided that a Liquefied Petroleum Gas connection shall be issued only in the name of any adult member of the household by a Government oil company under the public distribution system.

Q4. Is it possible to have both LPG and Piped Natural Gas (PNG) connection in the same household at the same time?

Ans. An existing customer of domestic PDS LPG connection of a Government Oil Company, who desires to avail PNG connection, is obliged to either surrender his/her LPG connection or keep it under safe custody with the concerned oil company or convert it to domestic non-subsidized category within sixty days from the date of obtaining PNG connection. An LPG connection kept under safe custody can be re-activated in future as per the rules stipulated by the oil companies. Use of PNG and LPG for domestic use is governed by the provisions of The Liquefied Petroleum Gas (Regulation of Supply and Distribution) Order 2000.

Q5. What is auto LPG and how it differs from LPG used for domestic purpose?

Ans. LPG used in motor vehicles is called Auto LPG and its use is governed by the provisions of The Liquefied Petroleum Gas (Regulation of Use in Motor Vehicles) Order, 2001. Auto LPG has a different specification than LPG used for domestic and commercial purposes. The Indian Standard Specification for Auto LPG is IS 14861 whereas specifications for LPG used for other purposes are IS 4576

MOTOR SPIRIT (MS) - PETROL

Q1. What is Motor Spirit (MS)?

Ans. Motor spirit means any hydrocarbon oil in the range of C4 -C12 (excluding crude mineral oil) obtained broadly by fractional distillation of crude oil which meets the requirements of Bureau of Indian Standards specification (BIS) No. IS-2796 and is suitable for use as fuel in spark ignition engines. It is basically a light distillate with boiling point range at 30- 210 Degree Celsius and density range of 720-775 Kg/m3 at 15 Degree Celsius. However for further details, please refer BIS specifications.

Q2. What are the various types of Petrol and Diesel available in the market?

Ans. Various nomenclatures are used for petrol as MS 93/95, Bharat Stage (BS) IV, branded petrol (with additives) etc. Similarly various types of diesels can be named depending on the use/product as Light Diesel Oil (LDO), BS IV, Bio Diesel, Branded Diesel (with additives) etc.

Q3. What is the Ethanol Blended Petrol?

Ans. Ministry of Petroleum & Natural gas in the year 2006 directed the Oil Marketing Companies (OMCs) to sell 5% Bio Ethanol Blended petrol as per BIS specification in the entire country except the North eastern estates, Jammu & Kashmir, Andaman Nicobar islands and Lakshadweep, with effect from 1st November, 2006. Currently this programme is being carried out in 21 States and 4 UTs with immediate target to achieve 10% ethanol blending in Petrol. This blended petrol is known as ethanol blended petrol.

HIGH SPEED DIESEL (HSD) - DIESEL

Q1. What is High Speed Diesel (HSD)?

Ans. High speed diesel means any hydrocarbon oil in the range of C13-17 (excluding mineral colza oil and turpentine substitute) broadly by distillation & cracking of crude oil which meets the requirements of Bureau of Indian Standards specification No IS-1460 and is suitable for use as fuel in compression ignition engines. It is primarily a middle distillate with boiling point range at 160-400 Degree Celsius and density range of 820-845 Kg/m3 at 15 Degree Celsius. However for further details, please refer BIS specifications.

Q2. What is the major difference between BS III & BS IV types of petrol and HSD?

Ans. Major difference in these grades of fuels is in terms of quantity of total sulphur present and aromatic content. For petrol, maximum permissible sulphur quantity and aromatic content (% volume) are kept at 150 (mg/kg) (ppm) and 42% respectively for BS-III whereas 50 mg/kg (ppm) and 35% respectively for BS IV. In HSD, quantity of maximum permissible sulphur in BS III types is maintained at 350 mg/kg (ppm) and 50 mg/kg (ppm) for BS IV.

Q3. What is Bio-diesel and Bio-diesel policy?

Ans. Bio-diesel is a fatty acid containing properties similar to petroleum diesel fuels, which can be a substitute of High Speed Diesel (HSD). MoP&NG announced a bio-diesel policy in October 2005 to encourage the production of bio-diesel. Under this policy, effected from 01.01.2006, OMCs are allowed to blend 5% of bio-diesel (B100) meeting the fuel quality as per BIS with high speed diesel. With renewed focus on Bio-fuels, the Government on 16.01.2015 allowed direct sale of biodiesel by manufacturers/suppliers of biodiesel/their authorized dealers and Joint Ventures (JVs) of OMCs as authorized by MoP&NG to all consumers. On 10th August, 2015, the Government has allowed sale of Bio-diesel (B100) by private manufacturers to bulk consumers. Also, retailing of bio-diesel blended diesel by Public.

OTHER PETROLEUM PRODUCTS

Q1. Can you broadly elaborate on mode of utilization and sector specific use of furnace oil /LSHS and LDO?

Ans. Major use of furnace oil (FO) /LSHS and LDO is as a fuel in Power, Fertilizer, petrochemicals and steel sectors. Some of the fertilizer plants consume FO as feed stock also. Other industries engaged in manufacturing of cement, paper, pharmaceuticals, Synthetic fibers etc. also consume FO/LSHS as fuels. LDO (Light Diesel Oil is broadly used for low RPM engines primarily employed in industry, transport and power sectors.

SUBSIDY

Q1. How is the subsidy on PDS Kerosene and Domestic LPG funded?

Ans. The subsidy on PDS Kerosene and Domestic LPG is met from the budgetary grants of MoP

Q2. Is there a single rate of subsidy for all bottling plants and depots in India under the PDS Kerosene and Domestic LPG schemes?

Ans. Separate subsidy rates have been approved by MoP&NG for each bottling plant and depot under the PDS Kerosene and Domestic LPG scheme.

Q3. How is the subsidy rate for PDS Kerosene and Domestic LPG determined?

Ans. The amount of subsidy per selling unit as on 1/4/2002 was the difference between the cost price and the issue price per selling unit and was computed ex-depot for PDS Kerosene and ex-bottling plant for Domestic LPG. It was decided that the subsidy per selling unit for any depot/ bottling plant effective 1/4/02 shall be frozen and remain unchanged for the financial year 2002-03. The subsidy admissible under this Scheme for 2003-04 was at 2/3rd level of the rates allowed during 2002-03 and the subsidy admissible for 2004-05, 2005-06 and 2006-07 is at one-third (1/3rd) level of the rates of subsidy for 2002-03.

Q4. Which are the far-flung areas under the Freight Subsidy scheme?

Ans. The following areas constitute far-flung areass under Freight Subsidy scheme:

  • North Eastern States including Sikkim, except the districts in which Digboi, Guwahati, Bongaigaon and Numaligarh refineries are located;
  • The States of Jammu & Kashmir excluding districts of Jammu & Kathwa, Himachal Pradesh, Uttaranchal excluding the districts of Haridwar and Udhamsing Nagar;
  • Andaman & Nicobar Islands; and
  • Lakshadweep Islands

Q5. Which oil companies are allowed to participate in the PDS Kerosene and Domestic LPG subsidy scheme and Freight Subsidy scheme?

Ans. Currently, IOC, HPC, BPC & IBP are allowed to participate in the above schemes.

Q6. What is the rate of subsidy allowed on PDS Kerosene and Domestic LPG?

Ans. The average rate of subsidy allowed on PDS Kerosene and Domestic LPG is given below:

The Average Rate of Subsidy allowed on PDS Kerosene and Domestic LPG
Years PDS SKO (Rs./ Litre) Domestic LPG (Rs/ Cylinder)
2002-03 2.45 67.75
2003-04 1.65 45.18
2004-05 onwards 0.82 22.58
PRICING

Q1. What is Import Parity Price (IPP)?

Ans. Import Parity Price IPP represents the price that importers would pay in case of actual import of product at the respective Indian ports. This includes FOB Price, Ocean freight, Insurance, Customs duty, Port dues etc.

Q2. What does Export Parity Price (EPP) mean?

Ans: Export Parity Price represents the price which oil companies would realize on export of petroleum products. This includes FOB Price and advance license benefit (for duty free import of crude oil pursuant to export of refined products.

Q3. How can Trade Parity Price be defined?

Ans: TPP is weighted average price of IPP and EPP with the weights of 80 and 20 respectively.

Q4. What do Refinery Gate Price / Refinery Transfer Price (RGP/ RTP) signify?

Ans. This is the price paid by the Oil Marketing Companies to domestic refineries for purchase of finished petroleum products at refinery gate.

Q5. How are prices of Major petroleum products i.e. Petrol, Diesel, PDS Kerosene and Domestic LPG are decided?

Ans. The Oil Marketing Companies (OMCs) pay Refinery Gate Price (RGP) based on Trade Parity Price (TPP) for purchase of Petrol and Diesel & Import Parity Price (IPP) for purchase of PDS Kerosene and Domestic LPG from refineries. The IPP/ TPP are determined based on prices prevailing in International market. The Retail Selling Price (RSP) of sensitive petroleum products for the consumers is calculated by taking into account the following elements:

  • Price paid to refinery
  • Inland freight up to the market
  • Marketing Cost & Margin
  • Dealers commission
  • Excise duty
  • VAT & local levies
GENERAL ENERGY & FUELS

Q1. What is the difference between Sales and Consumption of petroleum products as PPAC data base?

Ans. Sales of petroleum products consists of sales by Oil companies whether through retail outlets, commonly known as petrol pumps, or directly through bulk supplies to consumers. Consumption contains quantity of petroleum products sold by oil companies and consumption through direct imports by private parties.

Q2. What is the most economic primary mode of transportation for petroleum products?

Ans. The primary transportation of POL products across the country takes place by four transportation modes viz. pipelines, rail, coastal and road. Generally pipeline represents the cheapest mode of POL transportation.

Q3. What is fossil fuel?

Ans. Fossil fuels, any hydrocarbon substance taken from natural resources which were formed from biomass in the geological past, burned as a source of heat or power. The heat is derived from the combustion process in which carbon and hydrogen in the fuel substance combine with oxygen and release heat.

Q4. What are the various fuels primarily used in the industry?

Ans. Industry Fuels are Natural Gas, Naphtha, Furnace oil, Low Sulphur Heavy Stock (LSHS) and Petroleum coke.

 

NATURAL GAS

 Q1: What is Natural Gas?

Ans: Gas is commonly referred to as ‘natural gas’ as it is a naturally occurring gaseous hydrocarbon. It contains primarily methane - the simplest hydrocarbon with traces of ethane, propane, butane etc. Natural gas is odorless, colorless and lighter than air and produces very few emissions. It is considered the cleanest fossil fuel because of its clean-burning qualities.

 

Q2: What is the use of natural gas?

Ans: Natural gas is used for power generation and as feedstock for fertilizer plants and fuel for industrial use etc. It is also used for heating, hot water, cooking and outdoor living. It is becoming a fuel of choice in domestic and commercial sectors.

 

Q3: Does use of natural gas affect the environment?

Ans: Natural gas is one of the cleanest-burning fossil fuels; complete combustion produces mainly water vapor and carbon dioxide. The amount of greenhouse gas released from natural gas is significantly lower than emissions from wood, coal and oil. When natural gas replaces these other fuels, emissions of greenhouse gases are significantly reduced.

 

Q4: What is the difference between Natural Gas and LPG?

Ans: Natural gas is in gaseous form whereas LPG is in liquid form. Storage and transportation of natural gas in liquid form requires greater infrastructure whereas LPG can be stored in lesser infrastructure i.e. 5 kg/14 kg cylinders and can be transported through trucks, lorries etc., Therefore LPG is available in rural areas also. In addition, LPG produces greater heat due to its higher calorific value.

 

Q5: How is natural gas stored?

 

Ans: Natural gas can be stored in different ways. It can be stored underground. Natural gas is also stored as LNG after it is liquefied and can be stored in above/ below ground storage tanks. It can also be stored in pipelines temporarily. 

 

Q6: What is LNG?

Ans: Liquefied natural gas, or LNG, is natural gas in its liquid form. When natural gas is cooled to - 259 degrees Fahrenheit (-161 degrees Celsius), it becomes a clear, colorless, odorless liquid. LNG is neither corrosive nor toxic. Natural gas is primarily methane, with low concentrations of other hydrocarbons, water, carbon dioxide, nitrogen, oxygen and some sulfur compounds. During the process known as liquefaction, natural gas is cooled below its boiling point, removing most of these compounds. The remaining natural gas is primarily methane

with only small amounts of other hydrocarbons. LNG weighs less than half the weight of water so it will float if spilled on water.

 

Q7: Where does LNG come from?

Ans: A majority of the world's LNG supply comes from countries with large natural gas reserves. These countries include Algeria, Australia, Brunei, Indonesia, Libya, Malaysia, Nigeria, Oman, Qatar, and Trinidad and Tobago. India also procures LNG from these countries.

 

Q8: How is LNG transported?

Ans: LNG is transported in double-hulled ships specifically designed to handle the low temperature of LNG. These carriers are insulated to limit the amount of LNG that boils off or evaporates. This boil off gas is sometimes used to supplement fuel for the carriers. LNG carriers are up to 1000 feet long and require a minimum water depth of 40 feet when fully loaded.

 

Q9: How is LNG stored?

Ans: When LNG is received at most terminals, it is transferred to insulated storage tanks that are built to specifically hold LNG. These tanks can be found above or below ground and keep the liquid at a low temperature to minimize the amount of evaporation. If LNG vapors are not released, the pressure and temperature within the tank will continue to rise. LNG is characterized as a cryogen, a liquefied gas kept in its liquid state at very low temperatures. The temperature within the tank will remain constant if the pressure is kept constant by allowing the boil off gas to escape from the tank. This is known as auto-refrigeration. The boil-off gas is collected and used as a fuel source in the facility or on the tanker transporting it. When natural gas is needed, the LNG is warmed to a point where it converts back to its gaseous state. This is accomplished using a regasification process involving heat exchangers.

 

Q10: How is LNG used?

Ans: LNG is warmed to make in gaseous form and is used like natural gas in power generation, feedstock for fertilizer plants, fuel for industrial use, heating and cooking as well other industrial uses. LNG can also be kept as a liquid to be used as an alternative transportation fuel.

 

Q11: Why use LNG?

Ans: Since LNG occupies only a fraction (1/600) of the volume of natural gas, and takes up less space, it is more economical to transport across large distances and can be stored in larger quantities. LNG is a price-competitive source of energy that could help meet future economic needs in India as well as many foreign countries.

 

Q12: Is LNG flammable?

Ans: It depends. When cold LNG comes in contact with warmer air, it becomes a visible vapor cloud. As it continues to get warmer, the vapor cloud becomes lighter than air and rises. When LNG vapor mixes with air it is only flammable if within 5%-15% of natural gas is in air. Less than this is not enough to burn. More than this, there is too much gas in the air and not enough oxygen for it to burn.

 

Q13: What is CNG?

Ans: CNG stands for compressed natural gas. It is gaseous fuel and is a mixture of hydrocarbons, mainly methane. For use in automobiles as fuel, it is compressed to a pressure of 200-250 Kg/cm2 to enhance the vehicle on-board storage capacity. It is increasingly used as a vehicular fuel in states like Delhi, Maharastra and Gujarat. CNG is one of the most viable alternatives to traditional fuel for the automotive industry. It is low in pollutants, high in calorific value, economical and available in abundance globally. The use of CNG as an alternative fuel has far-reaching environmental and economic implications. Existing petrol vehicles can use CNG by installing a bi-fuel conversion kit and the converted vehicle will have the flexibility of operating on CNG or petrol.

 

Q14: Is CNG safe?

Ans: Yes, it is safe. The properties of CNG make it a safe fuel. It is lighter than air, so in case of a leak it just rises up and disperses into the atmosphere. Besides, a high auto-ignition temperature of 540 degrees centigrade as against petrol’s 360 degrees centigrade makes it a safe fuel. Also, in case of a leak, if CNG’s concentration in the air is less than 5% and more than 15%, the gas will not burn even in the presence of a spark.

 

Q15: Can vehicles be converted for CNG conversion?

Ans: Almost any petrol vehicle can be converted to operate on CNG. However only auto-workshops and service stations familiar with CNG kit fitment can ascertain technical suitability of a vehicle to use CNG. Vehicles with catalytic converters can also be fitted with CNG kit to use CNG, without any difficulty, as CNG does not contain lead.

 

Q16: What is the running range of vehicles on CNG?

Ans: Since CNG is a gaseous fuel, storage capacity for CNG in a vehicle is comparatively less than petrol. The quantity of CNG filled by the dispenser during refueling also depends upon pressure at the dispensing station. At maximum permitted filling pressure (200Kg/ cm2), an amount of 10 Kg CNG is stored in 60 litre size cylinders respectively. A fuel switch fitted on the dashboard is fitted to enable the vehicles to run on petrol, in case it runs out of CNG.

 

Q17: How safe is CNG as a transportation fuel?

Ans: From health and safety point of view, CNG is as good as, or better than petrol and other alternative fuels. Natural gas is lighter than air. In the event of a leak it will rise and disperse in the atmosphere and not form puddles (as in petrol) or spread (as in LPG). The ignition temperature of Natural Gas is much higher than petrol making it more difficult to ignite. A high gas concentration in the air is needed to ignite CNG, not easy to achieve even in the event of a leak. Natural gas will not burn when its concentration in air is below 5% or above 15%. With regard to health, in addition to reduction in air pollution, Natural gas is non- toxic and cannot be accidentally ingested. Further natural gas is non-corrosive and non-carcinogenic.

 

Q18: What is piped natural gas?

Ans: Piped Natural Gas (PNG) is mainly methane (CH4) with a small percentage of other higher hydrocarbons. The ratio of carbon to hydrogen is least in methane and hence it burns almost completely making it the cleanest fuel and environment friendly. It is procured from the oil / gas wells and transported through a network of mild steel (MD) and polyethylene (PE) pipelines to cater to the natural gas demand of customers in various segments, i.e. domestic / commercial and non - commercial / industrial segments across the country.

Q19: Is PNG safe?

Ans: Yes, PNG is safe .Flammable limit of natural gas is 5-15% with air whereas for LPG it is 2 to 10% with air. Natural Gas is lighter than air. Therefore, in case of a leak, it just rises and disperses into air given adequate ventilation. Auto ignition temperature of natural gas is 542˚C.