MARKET STRUCTURE AND PERFORMANCE OF DOWNSTREAM OIL INDUSTRY: A CASE STUDY OF INDIAN NATIONAL OIL COMPANIES

摘要

India presents a dichotomous downstream oil industry with three national downstream oil companies having high market shares in the domestic market but low presence in the petroleum product export markets, and two private companies which are major exporters of petroleum products from India and have low but growing market shares in domestic market. We study the market structure and performance of downstream oil industry in India and focus on the three national oil companies i.e. Indian Oil Corporation limited (IOCL), Hindustan Petroleum Corporation limited (HPCL) and Bharat Petroleum Corporation limited (BPCL). The market structure at the aggregate level and product level is calculated using Hirschman – Herfindahl Index and concentration ratio. The performance of the companies is measured through sales performance and efficient utilisation of infrastructure in the product markets of motor spirit, diesel, liquefied petroleum gas and kerosene. We understand the dynamics of competition in the downstream oil industry and form conjectures on the nature of competition between the three national oil companies. We form two conclusions by our study; firstly, there is stability in market shares of price regulated petroleum products and instability in market shares of price deregulated products. Secondly, BPCL performs better in performance parameter as compared to HPCL and is able to better balance commercial objectives with non-commercial objectives.