• Naveena Grape Kumari

The Covid-19 pandemic impact has shattered the crude oil demand as the majority of the oil and gas services end-user industries are witnessing a slowdown amid lockdowns. This market environment coupled with crude oversupply concerns are creating an imbalance resulting in a crude price crash. At a time when the global crude oil price is heading south, India's crude oil and natural gas production in 2019-20 dropped 6.1 per cent and 5.2 per cent, respectively, over 2018-19. Affected also by the Covid-19 lockdown, crude oil production dropped 5.5 per cent and natural gas 14.38 per cent in March over the equivalent period in 2019.According to the data released by the Petroleum Planning and Analysis Cell (PPAC), crude oil production in 2019-20 was 32.1 million tonnes (mt), 6.1 per cent lower than the 34.2 mt in 2018-19. On the other hand, cumulative natural gas production in 2019-20 was 31,179.96 million metric standard cubic metres (MMSCM), 5.2 per cent lower than the 32,873.4 MMSCM during 2018-19. Companies across the oil and gas value chain are re-evaluating their Capex guidance, as well as re-aligning their operations to offset the demand slowdown. This is leading to delays and deferrals in project execution and having a negative impact on the services industry. Pulling off all onerous feats since its inception, the Covid-19 crisis just added another victim to its list - oil. In an unprecedented event, oil for the first time in history breached the $0 mark, forcing the mankind to readjust the axes – another impossibility coming true! The WTI (West Texas Intermediate) futures contract of May expiry fell by over 300% to trade at below ‘minus US$39 per barrel’ on the NYMEX on Monday, April 20th. The Indian counterpart, MCX, accordingly had to settle the price at just INR 1 per barrel showing that it was unprepared for such an unusual volatility in the international markets. However, cheaper fuel may appeal to consumers in the shorter run, but this would also mean lower or no dividend payments by the financially burdened oil companies to the pension funds in the longer run; indirectly affecting millions who are reliant solely on their pension incomes. What does this mean for India? The government earns a large chunk of its income from excise duties with roughly 90% of it coming from oil imports. It is interesting to note that the prices for retailers have not been reduced since the government is using the buffer to fund its expenses. However, once the lockdown ends, the government can face increased pressure to reduce the fuel prices for consumers.

Keywords: Covid 19, Oil& Gas , Crude Price

"COVID -19: IMPACT ON OIL AND GAS SECTOR IN INDIA", International Journal of Emerging Technologies and Innovative Research (www.jetir.org), ISSN:2349-5162, Vol.8, Issue 7, page no.c837-c842, July-2021, Available :http://www.jetir.org/papers/JETIR2107377.pdf

"COVID -19: IMPACT ON OIL AND GAS SECTOR IN INDIA", International Journal of Emerging Technologies and Innovative Research (www.jetir.org | UGC and issn Approved), ISSN:2349-5162, Vol.8, Issue 7, page no. ppc837-c842, July-2021, Available at : http://www.jetir.org/papers/JETIR2107377.pdf