You may often hear the word raw oil or crude oil a lot. When you see news related to oil in newspaper, TV or mobile, the same thing happens. The same thing happens whether diesel and petrol are expensive or cheap. This is the same crude oil that comes out of oil wells and the companies that extract it sell it directly to companies that can clean it. When these companies clean this crude oil, various oils like diesel, petrol and kerosene are extracted from it. Now here you will be surprised to know that India which does not come anywhere in the top 10 in terms of oil production, comes at number 4 in terms of refining or cleaning crude oil. Today we are going to understand how much the companies doing this work earn.
Reliance has many refining factories in India. Apart from Reliance, Indian Oil, Essar, Bharat Petroleum, Hindustan Petroleum, Chennai Petroleum and many other companies also do refining work. These companies directly buy crude oil from other countries. Some companies also take contracts for extracting oil from wells located on land or in the sea and also sell the oil. For now, we are only mentioning those companies which refine oil in India, i.e. refine crude oil and prepare its by-products.
Understand complete mathematics from 1 barrel
The crude oil available in the international market is available on barrel basis. A barrel costs about $70 to $90. One barrel contains 159 liters of oil. Now if we take it at the rate of 80 dollars, then today the price of one barrel of oil will be around Rs 7200. Now there is 159 liters of oil in one barrel, so the price of one liter of crude oil is approximately Rs 45. You get diesel-petrol for Rs 90 to Rs 100. The reason for this is that the price of oil we are quoting is crude oil, which means you cannot use it in your car.
Also read: Market broken due to Middle East crisis, investors lost Rs 10 lakh crore on Holi
To use crude oil, it has to be refined i.e. cleaned. Big factories are set up to do this work. Broadly speaking, if crude oil is poured from one side, products like diesel, petrol, gasoline, petroleum etc. are produced from this oil at different temperatures. Now these refining companies sell some products themselves and some products are sold by other companies.
How much is the earning?
One barrel of crude oil contains 159 liters of oil but this quantity increases when it is refined. About 170 liters of petroleum products are produced from one barrel of oil. It produces 72 to 78 liters of petrol, 38 to 46 liters of diesel, 15 to 19 liters of jet fuel, 8-10 liters of LPG gas and 20-23 liters of other products. The interesting thing is that all these products are sold by these companies.
Also read: Hormuz closed, crude oil becoming expensive, will the prices of diesel and petrol increase or not?
When companies refine one barrel of oil, it costs them between 4 to 5 dollars i.e. 400 to 450 rupees. If we look at it per liter then it costs only Rs 3 to 4. Companies spend Rs 8 to 10 per liter on transportation and other things. At the same time, commission of dealers is Rs 3-4 per liter and refinery companies also earn their own commission. The commission of these companies ranges from Rs 4 to Rs 6 per litre.
In the last few years, it has been seen that due to the war between Russia and Ukraine, the dependence of many countries on India has increased. Indian oil companies have taken tremendous advantage of this opportunity. India bought cheap oil from Russia and exported petroleum products to many countries. Kpler, an agency working on data and analysis, had said in a report last year that in just 6 months of the year 2025, India exported 231 million barrels of oil.
Reliance’s share in total exports was 71 percent. If we look at the countries of the world, in America, oil can be refined at the rate of 18 million barrels per day every day. At the same time, India is at fourth place with a capacity of 46 lakh barrels per day. China is at second place with a capacity of 15 million barrels per day and Russia is at third place with a capacity of 64 lakh barrels per day.
Also read: Now the crude oil coming from Venezuela, will it be cheaper or more expensive than the Russian oil?
How much do companies make?
In the last three months of the year 2025, Indian government companies i.e. Indian Oil, BPCL and HPCL earned a profit of Rs 23,743 crore. At the same time, in the last quarter of the year 2024, the profit of these companies was Rs 10,545 crore. The reason for this was that crude oil was available cheaper and refining margins were higher. According to a report by ICICI Securities, the margin of Indian Oil which was $ 3 per barrel last year will reach $ 12.2 per barrel by 2025. Similarly, BPCL’s margin increased from $5.6 to $13.3 and Hindustan Petroleum’s margin increased from $6 to $8.9.
What does India sell?
Even though there are less oil wells in India, India sells many things by cleaning crude oil. Singapore, UAE and East African countries buy high speed diesel from India. Countries in the Middle East and Africa buy gasoline or petrol from India. All the airline companies buy jet fuel i.e. airplane oil from India only. Japan, South Korea and European Union countries buy naphtha (petrochemical), China and Japan petroleum coke and Middle East countries buy lubricants from India.
Also read: Need or compulsion, why is India putting so much emphasis on manufacturing?
In India, you buy diesel-petrol from petrol pumps of Hindustan Petroleum, Bharat Petroleum, Indian Oil and Reliance. All these companies have their own refineries and their main work is to refine crude oil. Many of these companies operate in many other countries besides India.
Comments are closed.