Future of Indian Fuel Industry – An Analysis by The Fuel Delivery

The fuel industry in India can boost the country’s economy faster than any other sector. This industry alone has the power to take the other major sectors of the country towards a high economic rise. According to recent reports, crude oil consumption is expected to grow at a CAGR of 3.60% to 500 million tons by 2040 from 221.56 million tons in 2017.

Our country’s growth and development depend highly on diesel demands, and therefore, the fuel industry is currently the best industry to invest in.

Despite of having such potentials, the diesel industry encounters a lot of difficulties that slows down the growth. In this blog, we will be highlighting the challenges that currently Indian Fuel Industries are facing.

Difficulties Encountered By Fuel Industries

Shortage of Fuel in Future

The rapid change in marketing dynamics and a heavy increase in diesel demands set an alarm for the fuel shortage in India. We all know that natural resources like oil, gas, power, and water are in limited supply and that humans can’t survive without these resources, yet there is no change in the behavioral patterns. People talk about sustainability, but in reality, there is a very short percentage of individuals who implement sustainable solutions in their lifestyles. The energy crisis is not a myth, the only solution is to create an urgency of using renewable resources and to lessen the negligent use of natural resources through increased conservation.

Apart from overconsumption of natural resources, there can be other causes behind fuel shortage:

• Outdated equipment : Old machinery consumes more fuel that curbs energy production.
• Overpopulation : The higher the population, the greater would be the demand.
• Energy wastage : Conserving energy is simple, and anyone can contribute to it by switching to sustainable solutions
• Unequal distribution of electricity : Load shedding is a common problem in India. Power breakdowns and the use of generators consume a lot of fuel.

Dependence on Foreign Country

According to a recent report, India’s dependence on foreign countries has increased to 84%. The oil import was 82.9% in the year 2017. The increasing consumption and the stagnant domestic production may lead to a rise in this percentage shortly.

Back in 2011, India was the fourth-largest energy consumer in the world, and in 2019, we reached the third position leaving Russian Federation behind.

In the past ten years, people have started to move to urban areas faster than before to get better employment and increase their standard of living. This shift has further increased energy consumption and, therefore, a heavy amount of fuel is consumed that ultimately calls for frequent diesel imports.

Here are top six countries who are heavily exporting diesel to India:

• China
• United Arab Emirates
• Switzerland
• US
• Iraq
• Saudi Arabia

Challenges of Efficiently Accessing Fuel

The infrastructure sector is the cornerstone of the Indian economy and plays an important role in accelerating the growth of India’s overall development. Sectors like manufacturing units, construction sites, corporate sectors, commercial buildings, etc., contributes to the growth of the economy of the country. Infrastructure development is critical for nurturing India's competitiveness in the global markets and accomplishing higher growth. Power generation and transmission sectors are improving at a fast pace, but diesel accessibility-related issues are still a big constraint in India that continues to limit the overall outcome and affects the GDP of our country.

Various infrastructural sectors face a huge problem of fuel accessibility even in today’s time. They hire local laborers to fetch fuel in canisters or barrels which often turns into a hazardous event.

Let’s find challenges these industries face due to fuel inaccessibility:

Storage:

Setting up a storage compound for a contract-based project is not feasible. Construction sites are bound to fetch fuel on a regular basis from the petrol stations, this is a cost-consuming method that not everyone can bear. Also, managing fuel at remote and sensitive areas where even light motor vehicles find it difficult to enter is a horrendous task and the construction site owners face a lot of pressure because of the inaccessibility of fuel.

Under ordering of fuel:

Manufacturing units often fall short of cash. Sudden breakdown of machinery, labor absenteeism, accidents, are unavoidable situations that they face frequently. The manufacturing Plant Head has to arrange fuel from time to time in order to keep the production going, but, sending the laborers to fetch fuel in barrels makes it even tougher for them. Sometimes, the problems like pilferage, wastage, and adulteration of fuel occur during this process, which ultimately causes more challenges for the Plant Head of the manufacturing unit.

Compromised Quality of Fuel

Fuel utilization in India is increasing every day due to a surge in population, urbanization, various developmental activities, and changes in lifestyle patterns. More demand for fuel leads to a huge rise in fuel prices. And this ultimately results in the mixing of kerosene and other liquids into the fuel you use. There is a huge price difference between different oils and this is the main reason behind its adulteration. Gasoline carries a much higher tax than diesel, which in turn is taxed more than kerosene. Solvents and recycled lubricants used in industries are other provisions or degraded substitutes that come with very little or no tax, resulting in adding adulterant components in the fuel.

Fuel adulteration is a common practice in India. Let’s find out what problems are caused by using compromised quality of fuel:

• Equipment failure: Sudden breakdown of machinery due to compromised fuel quality in a manufacturing unit is like a nightmare. It causes heavy monetary loss and slows down the production of the product.
• Increased pollution: Adulterated fuel increases the carbon emission that jeopardizes the environment and contributes to the bad quality of air that we breathe.
• Increased fuel consumption: Adulterated fuel is used sometimes in order to save money. Fuel in India is expensive than other liquid materials, so often the adulterated fuel is purchased to save fuel consumption.

Compromised Quantity of Fuel

Pilferage of fuel is a common problem witnessed in the fuel industry. Everyone acknowledges this issue, but no one has a mechanism to arrest this challenge, and today it has become a routine practice for various organizations. Usually, when there is a loss during transit and if a dealer complains, the oil company deducts the amount from the truck driver and pays the dealer. It is a huge problem for the person handling these issues as this process becomes tedious and hectic. Many sectors pay a fair amount for a lesser quantity of fuel, sometimes because of the unawareness of the pilferage and mostly because of being helpless about this malpractice.

There are heavy implications of fuel theft, following are some major issues:

• Increased prices: Fuel theft happens on a global level. There is a huge black market that takes advantage of this resource wealth, eventually resulting in increased fuel prices globally.
• Degraded environment: Every time there is theft in fuel, our environment gets affected. Problems like fuel spills, accidents while transferring fuel in generator sets, and machinery breakdown from adulterated fuel result in environmental degradation
• Revenue loss: The industries face a lot of revenue loss due to fuel pilferage. Pilferage leads to a daily loss of 4-7% fuel which can cause them a big revenue loss in the long run.

On-demand Diesel Delivery, The Absolute Necessity for Fuel Industry

The fuel industry is in great need of an efficient fuel delivery system that can shut off these problems at once. The Fuel Delivery is a contemporary solution for all your fuel requisites. Let’s have a look at a graphic to understand the solution to all these challenges.

Benefits of The Fuel Delivery