India's per capita consumption of commercial energy (viz., coal, petroleum and electricity) is only one-eighth of the global average and will increase with growth in Gross Domestic Production (GDP) and improvement in the standards of living (Anon., 1994b). Before the Second World War, about one-third of India's requirements of petroleum products were supplied by Myanmar, about one-eighth from Indian sources and the rest by imports. The average production of petroleum in India (excluding Myanmar) for the years 1929 to 1938 was 66 million gallons, of which 85 percent came from the oilfields in Assam and the rest from the Attoc oilfields, now in Pakistan. Separation of Myanmar from India meant a loss of a million tonnes of petroleum a year, leaving India with some 300,000 tonnes of crude output (Kulkarni, 1991). Trends in the recent past in the sectoral energy consumption bring out that the demand for petroleum products has increased dramatically, especially in industry as well as in transport sector. Projections of future demand for the total requirement of petroleum in the economy is likely to double by 2004 (Anon., 1992b). In India, the transport sector is the biggest consumer of petroleum as it consumes almost 46 percent of total petroleum, domestic sector consumes 20 percent, irrigation pump-sets consume 5 percent and power, utilities and industry together consumes 29 percent (Satish, 1991). Table 1 gives a broad idea about the demand projections of the petroleum products.

Table 1. Demand projections of Petroleum Products (Figures in thousand tonnes per annum)

Source: Feasibility Report prepared by M/s BRPL (Anon., 1994a)

 India's performance on the oil front in the last ten years has been impressive. Measured in terms of the proportion of import to total consumption, oil dependence went down from 70 percent at the commencement of the Sixth Plan to 30 percent at the end of the five-year period (Satish, 1991). By the end of this century India would need 91 million tonnes of oil. The proven reserves of crude oil in the country are estimated at 581 million tonnes (Deo et. al, 1994). The production of crude oil is likely to reach the level of 38.57 million tonnes in 1997-98 (Anon., 1995)

The total refining capacity in the country in 1994 was 53.40 MMTPA (Million Metric Tonnes Per Annum) spread over 13 refineries. The actual amount of crude processed in the year 1993-94 was 54.30 MMTPA representing a capacity utilization of 101.7 percent. The cumulative refinery production in 1995 was 24.12 thousand tonnes as against the pro-rata installed capacity of 23.64 thousand tonnes, representing 102 percent utilization of the installed capacity. While making projections for the Eighth Five Year Plan, it was estimated that the demand of petroleum products will be around 79 MMTPA in the terminal year of Eighth Plan and around 102 MMTPA by the end of Ninth Plan, i.e in the year 2001-2002. To meet the increasing consumption levels, Government of India granted approval to proposals for setting up new refineries including Bongaigaon Refinery and Petrochemicals Limited (BRPL) (Anon., 1995).

The major part of the petroleum product requirement in India is the middle distillates constituting Aviation Turbine Fuel (ATF), SKO, High Speed Diesel (HSD), and Light Diesel Oil (LDO). In terms of volume and growth of consumption, HSD is the single most important product amongst all petroleum products in the country (Anon., 1994a). From the Table 2 that gives the recurring demand of HSD, we can easily visualize the gap between supply and demand of HSD.

Table 2. Demand projection of HSD (Figures in thousand tonnes per annum)

 Source: Feasibility Report prepared by BRPL (Anon., 1994a)