The downstream business of refining crude oil and marketing products to end-users has long been a valuable, if occasionally out of fashion, part of the oil company portfolio. Today, the downstream business is attractive to a range of different types of owners. These companies seek out downstream profits from processing new low-cost crude oils, capturing product growth in emerging markets, and integrating further into petrochemical. Still, there is the ever-present concern that increasingly stringent policies aimed at decarbonization and local air quality will affect the downstream pillar of the oil business.
As the Indian democracy transitions from a traditionally socialist economy to a more urbanized, service sector– and market-based energy and political economy, key questions are raised on the fuel mix, the role of national champions, and the role of partnerships with the international companies—especially for technology and the regulatory framework that supports these choices. What affordable fuel mix is optimal, and should the market or government policy decide? To decrease pollution in Indian cities, how will the fuel mix choices need to change, especially in the power and transport sectors, where fossil fuels now dominate? How can national champions leverage their customer reach in the energy sector to bring the best technologies to consumers? Once consensus is achieved on the medium- and long-term fuel mix, what are the critical parameters of a market- and customer-supportive regulatory framework?