Indian Oil Coorporation

INDIAN OIL COORPORATION

CHAPTER 1

OIL & NATURAL GAS INDUSTRY ANALYSIS

[1.1] Introduction Oil and natural gas touch our lives in countless ways every day. Together, they supply more than 60

percent of our nation’s energy. They fuel our cars, heat our homes and cook our food. They help generate the

electricity that powers our daily lives, the crude oil supplies the building blocks for everything from dent-

resistant car fenders to soft drink bottles to camping equipment. Roiled by global economic turmoil, untamed

competition, and mind-numbing price swings, energy companies must be bold about transforming their

business models.

[1.2] Global Analysis of Oil and Gas Industry

Global economic weakness (in particular, slower growth in China and continuing financial woes in

Europe); tougher fuel economy regulations; more viable forms of alternative energy; and the development of

extraordinarily efficient engines on equipment as varied as cars, earthmovers, and power plants have all

combined to dramatically curtail the need for oil. Meanwhile, robust new reserves, especially of shale oil, in

numerous regions around the world are glutting the market. The increase in the supply of petroleum and other

liquid fuels was twice that of consumption.

Little surprise, then, that the U.S. Energy Information Administration estimates that in 2014 the

increase in the global supply of petroleum and other liquid fuels was almost twice the increase in

consumption. That was a recipe for lower prices and shrinking profits. And it presents a troubling outlook for

oil giants such as ExxonMobil, BP, Total, Chevron, and Shell that invested tens of billions of dollars in oil

exploration when prices were high but did not enjoy a concomitant boost in production or profit margins.

Though they’ve slimmed down by shedding unprofitable units and cutting back on investment more recently,

these companies still face increased competition from an array of state-owned oil companies and

independents.

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Fortunately, the picture is a little bit brighter in the gas sector: Global demand for natural gas is

expected to have risen by 2.2 percent per year by the end of 2019, according to the International Energy

Agency. Yet although natural gas will likely continue to represent an increased share of the global energy

mix, a share growing by 2.4 percent annually until 2018, analysts expect production to exceed demand in the

short term.

The industry has demonstrated the ability to be innovative and to lower costs when necessary.

Producers and refiners have harnessed new technological advances, such as digitization, robotics, and

analytics, to squeeze out higher volumes with less investment. But these digital breakthroughs have not often

extended to “above the ground” parts of the operation. For example, the logistics of water and waste

management in shale oil fields are far from best in class, and lean manufacturing techniques are seldom used

by upstream operators.

Additionally, oil and gas producers need to carefully evaluate their portfolios, field by field, to ensure

that each operation is a good fit for the company’s core strengths, customer demographics, and preferences

and skill sets. Only a few companies will successfully shore up demand and improve margins by

consolidating their strongest assets.

For downstream players, guaranteeing a buyer for their product is everything.The need to confront

demand challenges head-on cannot be underestimated. North American and European markets are shrinking

to the point where they can no longer absorb all of the oil and gas refined in the region (the U.S. now exports

more than 1 million barrels per day of energy products). Increasingly, refiners must look beyond their borders

for customers. But what they inevitably find in global markets is fierce competition from the Middle East and

other longtime exporters that have built large modern refineries hoping to serve Asian demand. To compete

effectively in this environment, downstream companies must either secure more robust and long-term

relationships with established and new customers or seek out smaller niche markets to avoid head-to-head

rivalries that have the potential to destroy their profit margins.

The biggest mistake that oil and gas companies can make in this difficult business landscape is to

focus solely on reducing costs (either operating or general and administrative) and spending. This strategy is

effective only in a very narrow range of market conditions and rarely effective enough to make businesses

successful over the long term.

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Rather, companies should carefully consider the supply of assets, analyze the logistics of accessing

available markets, and ensure a long-term presence in these markets without getting into a bidding war.

Oversupply and lower prices represent a real challenge to the industry, but that doesn’t mean the future is all

gloom. It just means that producers and refiners need to be prepared and adopt strategies that take advantage

of the new reality.

[1.3] Oil and Gas Industry Analysis of India

The oil and gas sector is one of the six core industries in India. It is of strategic importance and plays a

pivotal role in influencing decisions across other important spheres of the economy.

In 1997–98, the New Exploration Licensing Policy (NELP) was envisioned to deal with the ever-

growing gap between demand and supply of gas in India. As per a recent report, the oil and gas industry in

India is anticipated to be worth US$ 139,814.7 million by 2015. With India’s economic growth closely linked

to energy demand, the need for oil and gas is projected to grow further, rendering the sector a fertile ground

for investment.

To cater to the increasing demand, the Government of India has adopted several policies, including

allowing 100 per cent foreign direct investment (FDI) in many segments of the sector, such as natural gas,

petroleum products, and refineries, among others. The government’s participation has made the oil and gas

sector in the country a better target of investment. Today, it attracts both domestic and foreign investment, as

attested by the presence of Reliance Industries Ltd (RIL) and Cairn India.

India is the fourth-largest energy consumer (2013) in the world. Oil and gas account for 37 per cent of

total energy consumption. Oil consumption is estimated to reach four million barrels per day (MBPD) by

FY16, expanding at a compound annual growth rate (CAGR) of 3.2 per cent during FY08-16.

Domestic production accounts for more than three quarters of the country's total gas consumption.

Total crude oil production in FY14 stood at 37.9 million metric tonnes (MMT). ONGC accounted for 59 per

cent of total crude oil production in India. Total gas production was 35.4 billion cubic metres (BCM) in FY14.

India has a network of 9,785 km of crude pipeline having a capacity of 139.25 million metric tonnes

per annum (MMTPA). In terms of length, IOCL accounts for 45.5 per cent of India’s crude pipeline network.

In terms of capacity, ONGC accounts for 47.4 per cent followed by IOCL at 29.2 per cent.

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The Government of India has initiated the National Gas Hydrate Programme (NGHP), a consortium of

national E&P companies and research institutions, to map gas hydrates for use as an alternate source of

energy. It has allowed 100 per cent foreign direct investment (FDI) in E&P projects/companies and 49 per

cent in refining under the automatic route.

In light of mounting LNG production, huge opportunity lies for LNG terminal operation, engineering,

procurement and construction services.

Oil consumption in India

Market SizeBacked by new oil fields, domestic oil output is anticipated to grow to 1 MBPD by FY16. With India

developing gas-fired power stations, consumption is up more than 160 per cent since 1995. Gas consumption

is likely to expand at a CAGR of 21 per cent during FY08–17.

Domestic production accounts for more than three-quarters of the country’s total gas consumption.

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2016

2013

2012

2011

2010

2009

2008

0 0.5 1 1.5 2 2.5 3 3.5 4 4.5

OIL CONSUMPTION

OIL CONSUMPTION


India increasingly relies on imported LNG; the country was the fifth-largest LNG importer in 2013,

accounting for 5.5 per cent of global imports. India’s LNG imports are forecasted to increase at a CAGR of 33

per cent during 2012–17.

State-owned ONGC dominates the upstream segment (exploration and production), accounting for

approximately 60 per cent of the country’s total oil output (FY13).

IOCL operates 11,214 km network of crude, gas and product pipelines, with a capacity of 1.6 MBPD

of oil and 10 million metric standard cubic metre per day (MMSCMD) of gas. This is around 30 per cent of

the nation’s total pipeline network. IOCL is the largest company, operating 10 out of 22 Indian refineries,

with a combined capacity of 1.3 MBPD.

InvestmentAccording to data released by the Department of Industrial Policy and Promotion (DIPP), the

petroleum and natural gas sector attracted foreign direct investment (FDI) worth US$ 6,519.53 million

between April 2000 and January 2015.

Following are some of the major investments and developments in the oil and gas sector:

Kirloskar Oil Engines Ltd (KOEL) and MTU Friedrichshafen, GmbH have signed a memorandum of

understanding (MoU). The MoU lays down exclusive cooperation on the building and commissioning

of emergency diesel gensets (EDG).

CDP Bharat Forge GmbH has acquired 100 per cent equity shares of Mécanique Générale Langroise

(MGL) for € 11.8 million (US$ 12.91 million). The acquisition would consolidate Bharat Forge’s

position in the oil and gas sector by enhancing service offerings and geographical reach.

Technip has won a € 100 million (US$ 109.37 million) contract from Oil and Natural Gas Corporation

(ONGC) to build an onshore oil and gas terminal in Andhra Pradesh.

Essar Oil Ltd has signed a deal with Russia-based OAO Rosneft to import 10 million tonnes (MT) of

crude oil per year for 10 years.

The oil marketing companies have reduced the price of non-subsidised liquefied petroleum cooking

gas (LPG) by Rs 43.5 (US$ 0.69) per cylinder. The companies have also reduced jet fuel rates by 12.5

per cent, the sixth straight reduction in prices since August 2014.

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Reliance Industries Ltd (RIL) and Mexican state-owned company Petroleos Mexicanos (Pemex) have

entered into a memorandum of understanding (MoU) for cooperation in the oil and gas sector.

GAIL Global USA LNG LLC (GGULL) has signed an agreement with the US-based WGL Midstream

Inc for sourcing gas required to produce 2.5 MT of liquefied natural gas (LNG) a year at the Cove

Point Terminal in Maryland, US.

Shares In Crude Pipeline Network By Length

In terms of length, IOCL accounts for 45.5 per cent (4,448 km) of India's crude pipeline network.

Government InitiativesTwo landmark initiatives for energy efficiency – Design Guidelines for Energy Efficient Multi-Storey

Residential Buildings and Star Ratings for Diesel Gensets and for Hospital Buildings – were launched by Mr

Dharmendra Pradhan, Minister of State with Independent Charge for Petroleum and Natural Gas, Government

of India.

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Percentage Share

IOCL ONGC OTHERS


Some of the major initiatives taken by the Government of India to promote oil and gas sector are:

India and Norway have discussed bilateral relationship between the two countries in the field of oil

and natural gas and decided to extend cooperation in hydrocarbon exploration.

To strengthen the country`s energy security, oil diplomacy initiatives have been intensified through

meaningful engagements with hydrocarbon rich countries.

PAHAL - Direct Benefit Transfer for LPG consumer (DBTL) scheme launched in 54 districts on

November 11, 2014 and expanded to rest of the country on January 1, 2015 will cover 15.3 crore

active LPG consumers of the country.

24 x 7 LPG service via web launched to provide LPG consumers an integrated solution to carry out all

services at one place, through MyLPG.in, from the comfort of their home.

Special dispensation for North East Region: For incentivising exploration and production in North

East Region, 40 per cent subsidy on gas price has been extended to private companies operating in the

region, along with ONGC and OIL.

The Cabinet Committee on Economic Affairs (CCEA), chaired by Prime Minister Mr Narendra Modi,

has approved a mechanism for procurement of Ethanol by Public Sector Oil Marketing Companies

(OMCs) to carry out the Ethanol Blended Petrol (EBP) Program.

By 2015-16, India’s demand for gas is set to touch 124 MTPA against a domestic supply of 33 MTPA and

higher imports of 47.2 MTPA, leaving a shortage of 44 MTPA, as per projections by the Petroleum and

Natural Gas Ministry of India. Moreover, Business Monitor International (BMI) predicts that India will

account for 12.4 per cent of Asia-Pacific regional oil demand by 2015. Exchange Rate Used: INR 1 = US$

0.016 as on March 24, 2015

CHAPTER 2

INDIAN OIL CORPORATION – PROFILE

[2.1] Introduction

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Indian Oil Corporation Limited, or Indian Oil, is an Indian state-owned oil and gas corporation with its

headquarters in New Delhi, India. It is the world's 88th largest corporation, according to the Fortune Global

500 list, and the 2nd largest public corporation in India when ranked by revenue.

Indian Oil and its subsidiaries account for a 49% share in the petroleum products market, 31% share in

refining capacity and 67% downstream sector pipelines capacity in India. The Indian Oil Group of companies

owns and operates 10 of India's 22 refineries with a combined refining capacity of 65.7 million metric tonnes

per year. In FY 2012 IOCL sold 75.66 million tonnes of petroleum products and reported a PBT of 37.54

billion, and the Government of India earned an excise duty of 232.53 billion and tax of 10.68 billion.

The company is mainly controlled by Government of India which owns approximately 69% shares in

the company. It is one of the seven Maharatna status companies of India, apart from Coal India Limited,

NTPC Limited, Oil and Natural Gas Corporation, Steel Authority of India Limited, Bharat Heavy Electricals

Limited and Gas Authority of India Limited.

[2.2] Corporate Logo

Essential Elements of the logo

A saffron coloured circle/globe. Enclosed by a dark blue coloured outer ring and a dark blue coloured band

across on which is written the name Indian Oil in Devanagri script. The saffron circle represents energy as a

derivative of the Sun, connoting life and the future. The dark blue outer ring and the horizontal band

symbolize technology for harnessing this energy. However, whenever the logo is not accompanied by the full

name "Indian Oil Corporation Limited", the lettering "Indian Oil" in two colours may be incorporated under

the logo. The word "Indian Oil" when incorporated in running matter should continue to be used as one word

with the letter "I" and "O" in capitals as shown. It should be in single colour (Dark Blue) and not in two SMS CUSAT 8

http://en.wikipedia.org/wiki/Gas_Authority_of_India_Limited

http://en.wikipedia.org/wiki/Bharat_Heavy_Electricals_Limited

http://en.wikipedia.org/wiki/Bharat_Heavy_Electricals_Limited

http://en.wikipedia.org/wiki/Steel_Authority_of_India_Limited

http://en.wikipedia.org/wiki/Oil_and_Natural_Gas_Corporation

http://en.wikipedia.org/wiki/NTPC_Limited

http://en.wikipedia.org/wiki/Coal_India_Limited

http://en.wikipedia.org/wiki/India

http://en.wikipedia.org/wiki/Maharatna

http://en.wikipedia.org/wiki/Government_of_India

http://en.wikipedia.org/wiki/Government_of_India

http://en.wikipedia.org/wiki/Fortune_Global_500

http://en.wikipedia.org/wiki/Fortune_Global_500

http://en.wikipedia.org/wiki/New_Delhi,_India

http://en.wikipedia.org/wiki/Natural_gas

http://en.wikipedia.org/wiki/Petroleum


colours.

Proportions of the logo

[2.3] HistoryIndian Oil began operations in 1958 as Indian Oil Company Ltd. The Indian Oil Corporation was

formed in 1964, with the merger of Indian Refineries Ltd.

Recently Indian Oil Corp (IOC) has raised $500 million by selling 10-year dollar-denominated bonds, its

fourth such issue overseas in the last three and a half years. In 2003, its Gujarat Refinery was awarded the

"Best of all" Rajiv Gandhi National Quality Award.

[2.4] Vision of IOCLA major diversified, transnational, integrated energy company, with national leadership and a strong

environment conscience, playing a national role in oil security & public distribution.

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IOCL GroupIOCL Group consists of Indian Oil Corporation Ltd. and the following subsidiaries:

Lanka IOC Ltd

Indian Oil (Mauritius) Ltd.

IOCL Middle East FZE

Indian Oil Technologies Ltd

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[2.6] Values of IOCL

Values exist in all organizations and are an integral part of any it. Indian Oil nurtures a set of core values:

Care Innovation Passion Trust

[2.7] Mission of IOCLIOCL has the following mission:

To achieve international standards of excellence in all aspects of energy and diversified business with

focus on customer delight through value of products and services and cost reduction.

To maximize creation of wealth, value and satisfaction for the stakeholders.

To attain leadership in developing, adopting and assimilating state-of- the-art technology for

competitive advantage.

To provide technology and services through sustained Research and Development.

To foster a culture of participation and innovation for employee growth and contribution.

To cultivate high standards of business ethics and Total Quality Management for a strong corporate

identity and brand equity.

To help enrich the quality of life of the community and preserve ecological balance and heritage

through a strong environment conscience.

[2.8] Objectives and Obligations

Objectives

To serve the national interests in oil and related sectors in accordance and consistent with Government

policies.

To ensure maintenance of continuous and smooth supply of petroleum products by way of crude oil

refining, transportation and marketing activities and to provide appropriate assistance to consumers to

conserve and use petroleum products efficiently.

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To enhance the country’s self-sufficiency in crude oil refining and build expertise in laying of crude

oil and petroleum product pipelines.

To further enhance marketing infrastructure and reseller network for providing assured service to

customers throughout the country.

To create a strong research & development base in refinery processes, product formulations, pipeline

transportation and alternative fuels with a view to minimising/eliminating imports and to have next

generation products.

To optimise utilisation of refining capacity and maximise distillate yield and gross refining margin.

To maximise utilisation of the existing facilities for improving efficiency and increasing productivity.

To minimise fuel consumption and hydrocarbon loss in refineries and stock loss in marketing

operations to effect energy conservation.

To earn a reasonable rate of return on investment.

To avail all viable opportunities, both national and global, arising out of the Government of India’s

policy of liberalisation and reforms.

To achieve higher growth through mergers, acquisitions, integration and diversification by harnessing

new business opportunities in oil exploration & production, petrochemicals, natural gas and

downstream opportunities overseas.

To inculcate strong ‘core values’ among the employees and continuously update skill sets for full

exploitation of the new business opportunities.

To develop operational synergies with subsidiaries and joint ventures and continuously engage across

the hydrocarbon value chain for the benefit of society at large.

Obligations

Towards customers and dealers:

To provide prompt, courteous and efficient service and quality products at competitive prices.

Towards suppliers:

To ensure prompt dealings with integrity, impartiality and courtesy and help promote ancillary

industries.

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Towards employees:

To develop their capabilities and facilitate their advancement through appropriate training and career

planning. To have fair dealings with recognised representatives of employees in pursuance of healthy

industrial relations practices and sound personnel policies.

Towards community:

To develop techno-economically viable and environment-friendly products.

To maintain the highest standards in respect of safety, environment protection and occupational health

at all production units.

Towards Defence Services:

To maintain adequate supplies to Defence and other para-military services during normal as well as

emergency situations.

Financial Objectives:

To earn adequate return on the capital employed and maintain a reasonable

annual dividend on equity capital.

To ensure maximum economy in expenditure.

To manage and operate all facilities in an efficient manner so as to generate adequate internal

resources to meet revenue cost and requirements for project investment, without budgetary support.

To develop long-term corporate plans to provide for adequate growth of the Corporation’s business.

To reduce the cost of production of petroleum products by means of systematic cost control measures

and thereby sustain market leadership through cost competitiveness.

To complete all planned projects within the scheduled time and approved cost.

[2.9] Organizational Structure

The whole of Indian Oil Corporation (IOC) works under Corporate Office located at New Delhi. It

follows hierarchical structure where the decision flows from top to bottom and the data flows from bottom to

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top. Under the corporate office there are 5 divisions namely- Pipelines, Refineries, R&D, Marketing & Assam

oil division. The Marketing division located at Mumbai co-ordinates with the regional offices i.e. North,

South, East & West Region office, the other Divisional Offices & SBI for decisions regarding investments.

The Regional offices co-ordinates with respective state office that in turn coordinates with respective location

offices.

CHAPTER 3

FUNCTIONAL DEPARTMENTS

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[3.1] Corporate Overview

Indian Oil Corporation Limited is the country’s flagship national oil company and highest ranked

(96th) Indian corporate in the prestigious Fortune ‘Global 500’ listing in the year 2014, with business

interests straddling the entire hydrocarbon value chain.

With dominant share of national refining and pipeline capacities as well as in petroleum products’

market, Indian Oil has been meeting the energy needs of the country for more than five decades now. A

strong workforce of about 33,800 employees has been instrumental in achieving such glorious milestones.

The company’s operations are strategically structured along the core business areas viz. Refineries,

Pipelines, Marketing, and Research & Development. Additionally, to keep up with the rapid changes in

business environment, Business Development group was formed with a mandate to expand the existing

portfolio through backward and forward integration such as embarking into Exploration & Production and

venturing into Petrochemicals and Natural Gas business.

[3.2] Major Divisions of IOCLIndian Oil Corporation Limited (Indian Oil) owns and operates a network of crude oil and petroleum

product pipeline in India. It has two divisions: Refineries Division and Marketing Division. The Refineries

Division is focused on managing the public sector refineries and the Marketing Division is focused on

distribution not only the entire production of public sector refineries but also the deficit products imported. It

is organized in two segments: sale of petroleum products, and other businesses, which comprises sale of

imported crude oil, sale of gas, petrochemicals, explosives and cryogenics, wind mill power generation and

oil and gas exploration activities jointly undertaken in the form of unincorporated joint ventures. The Digboi

Refinery of Assam Oil Division processed 0.623 million metric tons (MMT) of crude oil during the year. The

Division sold about 1.067 MMT of products. IBP Division comprises the explosives and cryogenics business.

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3.3 Refineries

Indian Oil and its subsidiary company, Chennai Petroleum Corporation Ltd., together own and operate

10 of India’s 22 refineries with a total refining capacity of 65.7 MMTPA accounting for 30.54 percent of

country’s refining capacity.

Presently, the Corporation’s flagship, state-of-the-art 15 MMTPA refinery project at Paradip is inching

closer towards commissioning. Once commissioned, this refinery will improve Corporation’s competitiveness

in the market and provide enhanced operational flexibility.

3.4 Pipelines

The Corporation’s cross-country network of over 11,000 kms of crude oil, product and gas pipelines is

the largest in the country, meeting the vital energy needs of consumers in an efficient and environment-

friendly manner.

Firm action plans are in hand to augment the pipeline capacities for transportation of crude oil,

petroleum products including LPG, develop crude oil tankages to improve blending in order to enable

refineries to process heavier crudes as well.

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REFINERIES PIPELINES MARKETING

R& D ASSAM OIL


3.5 Marketing

With indefatigable workforce, robust countrywide dealership/ distributorship network backed by

sprawling infrastructures such as depots, terminals, aviation fuel stations, and LPG bottling plants, the

Corporation caters every corner of the country in every situation, be it scorching heat or freezing cold. The

rural markets of the country are being catered by Kisan Seva Kendra (KSK), special format retail outlets. The

KSKs are not only becoming the new face of the organization but also bolstering its market presence. Almost

every second household in India is fuelled through Indane LPG, through its vast network of retail distributors.

A large network of consumer pumps are also in operation for the convenience of bulk consumers, ensuring

products and inventory at their doorstep. The corporation enjoys more than 51 percent of infrastructure share

in the industry as a market leader. Indian Oil’s aviation service commands an enviable market share in the

aviation fuel business and successfully services the demands of the Indian Defence Service, domestic and

international flag carriers as well as private airlines.

Indane LPG, SERVO lubricants, PROPEL petrochemicals, are the most common and much-respected

energy brands of the Corporation amongst other.

Customer centricity has been always the focus of the Corporation. Thrust has been on modernization

of retail outlets through automation, stringent quality control measures, highway networking, loyalty

programmes, fore court management, IVRS etc.

3.6 Research & Development

Indian Oil’s state-of-the-art Research & Development Centre is a pioneer in lubricants formulation,

refinery processes, pipeline transportation and alternative fuels. This nodal agency of the Indian hydrocarbon

sector has been instrumental in ushering in research on Hydrogen fuel in the country. DHDT technology,

Light Naptha Isomerization technology, INDMAX technology (for maximizing LPGas yield), INDAdeptG,

Oilivorous bio-remediation technology (extended to marine applications too), Diesel Hydro DeSulphurisation

(DHDS) catalyst, a special Indicat catalyst for Bharat Stage - IV compliant Diesel, IndVi catalyst for

improved distillate and FCC throughput, and adsorbent based deep sulphurisation process for gasoline and

diesel streams are some of the in-house technologies and catalysts developed by Indian Oil.

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[3.7] Business model of IOCL

3.8 Refinery O&M Management

Indian Oil has over four decades' experience in operation & maintenance (O&M) of over 180 process

units at its seven refineries. Its reservoir of experienced technical teams has been providing world-class

technical support to leading petroleum companies around the world.

Having absorbed state-of-the-art technologies of leading process licensors like UOP, Chevron, IFP, Stone &

Webster, Mobil, Haldor Topsoe, KTI/Technip, Linde, CD-Tech, Stork Comprimo, etc., IndianOil in an

excellent position to offer O&M services for latest technologies such as distillate FCCUs, Resid FCCUs,

hydrocrackers, reformers (both semi-regenerative and continuous catalytic regeneration types), lube

processing units, catalytic de-waxing units, cokers, coke calciners, visbreakers, merox, hydro-treaters for kero

and gasoil streams, etc. IndianOil refineries also have units for producing specialty products such as bitumen,

LPG, MTBE, Butene-1, Propylene, Xylenes, Di-Methyl Terephthalate (DMT), polyester staple fibre (PSF)

and other petrochemicals like Linear Alkyl Benzene, Paraxylene (PX), Purified Terepthalic Acid (PTA), etc.

IndianOil's technical team is committed to continuous improvement in O&M practices to achieve the highest

standards of efficiency & reliability in pursuit of run-length improvement for maximisation of on-stream days.

Special attention is given to safety, health & environment protection practices.

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All IndianOil refineries are ISO certified, with the related documentation and manuals updated on a

regular basis. A number of IndianOil clients have benefited from these exhaustive manuals prepared in-house.

The ISO management & documentation is tailor-made to suit the requirements of individual refineries, taking

into consideration the design details of the licensors.

In addition, IndianOil also offers the specialised services of its experts for commissioning/start-up assistance

depending on the client's need. Its team is also well-equipped to prepare operation manuals with clear

instructions for plant start-up, operation, shutdown, emergency handling, etc.

3.9 Operation and Maintenance

IndianOil's Pipelines Division provides services for operations and maintenance. The clientele includes the

existing pipelines companies and companies venturing into pipelines business.

The services provided for Operations and Management are:

Cross country crude and multi-product pipelines

Mainline engines, pumps and motors

Station facilities, crude oil and petroleum product tanks

Automation and advanced control systems

Single Point Mooring (SPM) Systems, submarine pipelines

Development of maintenance procedures, formats, schedules, manuals

Corrosion monitoring and control

Technical audits for better performance of energy consumption, quality, safety and environment

protection

Onsite and offsite disaster management plans

Selection, testing and evaluation of Chemical Drag Reducers and corrosion inhibitors

IndianOil's expert group of engineers located in different parts of the country deliver the services offered

above. The customers can contact the Executive Director (Operations) for operation-related services.

3.10 Human Resource Department of IOCLSMS CUSAT 19


HR functions

Training

Interactive sessions with employees to promote interpersonal effectiveness and bring down barriers to

communication

Motivational work groups, discussion forums

Appraisals and Reward system

Recruitment

Talent Acquisition (Recruitment and Selection)

IOCL follows a mix of open and campus recruitment. For open recruitment advertisements are published in

leading national dailies. For campus recruitment, Indian Oil visits IIT’s , NIT’s and other reputed technical

institutes of the country. After 2010, IOCL stopped conducting its own exam and start considering GATE

scores.

Selection procedure through GATE score

Written test Group Discussion/Group Task Personal interview

Talent management (Performance, Career and Competence Management)

Implementation of non-monetary and monetary rewards for enhancing corporate and individual

performance. Improved recruitment policy is followed to attract the best talent. Intra and inter – function job

rotation is there. Challenging assignments are given. Online performance management system has been

implemented since 2005-06. There are programs for mentoring to retain talent.

Learning and development

IOCL lays emphasis on training and motivating to keep its workforce constantly engaged. The

learning services IOCL offers are on a select basis to managers from the industry on national and international

basis. Indian oil setup the indian oil institute of petroleum management (IIPM) as an apex centre for

learning.IIPM also offer a 1-yesr MBA programme in petroleum management.IOCL conducts discipline –

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specific training workshops from time to time so that employees can constantly upgrade competencies and

strengthen individual capacities and strengthen individual capacities for organizational effectiveness.

Total rewards (Compensation and Benefits)

There are 3 categories of employees – broad level executives, below board level executives ,

workmen. There is a well defined pay structure for each category. Compensation structure consists of: Basic

pay and DA, Accommodation facilities ,prerequisite and allowances, performance related payments,

superannuation benefits.

Benefits and services

The employee can be posted to any location and IOCL offers best quality of life through all amenities.

From education of children to health care of parents everything is provided by IOCL to its employees.

Life – time medical care : Post – retirement medical benefits

Talent Retention (Employee Engagement and Initiatives)

Sport activities

Club facilities

Article writing competition

Recognition in annual magazines.

Unique HR practices

e-Sambandh

Electronic performance management system (e-PMS) for performance appraisal.

Women in Public Sector (WIPS) cell.

First company to take GATE scores for recruitment to attract bright talent

In- house training via IIPM.

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(` in Crore)

Note Page March-14 March-13

(8)

2,802.90 821.94

- (450.09)

103.52 270.78

(9) 7,019.09 5,005.17

33 142 (10)

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28.91 20.61

28.91 20.61

10 10

1 104

2 - 47 107

Income and expenditure account for the year ended 31 st march 2014 on provision of township, education, medical and other facilities

(` in Crore)

Particulars March-14 March-13

INCOME :1. Recovery of House Rent 7.59 6.762. Recovery of Utilities-Power and Water 4.52 4.323. Recovery of Transport Charges 0.26 0.214. Other Recoveries 7.93 7.085. Excess of Expenditure over Income 468.60 422.19

TOTAL : 488.90 440.56EXPENDITURE :

SMS CUSAT 24


1. Salaries, Wages and PF & Gratuity Contribution 155.54 141.072. Consumable Stores and Medicines 31.12 27.033. Repairs and Maintenance 110.03 92.164. Interest 16.77 14.795. Depreciation 12.65 12.306. Miscellaneous Expenses :

Taxes, License Fees, Insurance etc. 36.44 30.267. Utilities-Power, Water and Gas 99.82 92.638. Rent 0.99 0.549. Subsidies for Social & Cultural Activities 17.63 23.0210. Bus Hire Charges 1.81 1.2611. Club and Recreation 0.54 0.1712. Others 5.56 5.33

TOTAL: 488.90 440.56

SMS CUSAT 25


CASH FLOW STATEMENT For the Year Ended 31 st March 2014 (` in Crore)

Particulars March-14 March-13A Cash Flow from Operating Activities

1 Profit Before Tax 9,925.51 5,647.80

2 Adjustments for :

Depreciation 5,768.65 5,219.80

Loss/(Profit) on sale of Assets (net) 57.51 21.44

Loss/(Profit) on sale of Investments (net) 42.54 (28.01)

Amortisation of Capital Grants (2.26) (1.46)

Amortisation of Premium on Forward Contracts (583.20) 15.49

Provision for Probable Contingencies (net) 238.11 407.91

Provision for Loss on Investments (net) 483.12 (634.15)

Provision for Doubtful Debts, Advances, Claims andObsolescence of Stores (net) 103.84 16.06

Provision for Dimunition in ‘Receivable from trust’ (net) (0.29) (110.15)

Provision for MTM Loss/(Gain) on interest rate swap (30.61) 10.81

Foreign Currency Monetary Item Translation (47.66) -Difference Account

Interest Income on Investments (1,037.41) (1,118.85)

Dividend Income on Investments (884.91) (999.47)

Interest Expenditure 5,086.60 6,434.91

9,194.03 9,234.33

3 Operating Profit before Working Capital Changes (1+2) 19,119.54 14,882.137. Change in Working Capital:

(Excluding Cash & Bank Balances)

Trade & Other Receivables (2,291.87) (7,617.18)

Inventories (5,391.55) (2,504.96)

Trade and Other Payables 12,340.41 7,855.32

Change in Working Capital 4,656.99 (2,266.82)

5 Cash Generated From Operations (3+4) 23,776.53 12,615.31

6 Less : Taxes paid 1,726.64 1,004.71

7 Net Cash Flow from Operating Activities (5-6) 22,049.89 11,610.60

B Cash Flow from Investing Activities:Sale/Transfer of Assets 449.63 721.87

Sale / Maturity of Investments 1,117.42 782.27

Interest Income on Investments 1,037.32 1,128.40

Dividend Income on Investments 884.91 999.47

Purchase of Assets (4,876.39) (2,723.23)

Investments in Subsidiaries (6,269.09) (164.04)

Investments in Long Term Investments / Others (187.66) (60.83)

Expenditure on Construction Work in Progress (9,992.72) (9,022.20)

Net Cash Generated/(Used) in Investing Activities: (17,836.58) (8,338.29)

Contd...

SMS CUSAT 26


SMS CUSAT 27


(` in Crore)

Particulars March-14 March-13

C Net Cash Flow From Financing Activities:Proceeds from Long-Term Borrowings 16,253.67 7,098.44

Repayments of Long-Term Borrowings (2,513.58) (5,078.14)

Proceeds from/(Repayments of) Short-Term Borrowings (8,010.39) 3,426.90

Interest paid (6,075.83) (7,115.08)

Dividend/Dividend Tax paid (1,761.94) (1,408.15)Net Cash Generated/(Used) from Financing Activities: (2,108.07) (3,076.03)

D Net Change in Cash & Bank Balances 2,105.24 196.28(A+B+C)

E 1 Cash & Bank Balances as at end of the year 2,608.53 503.29

Less:

E 2 Cash & Bank Balances as at the beginning of year 503.29 307.01

NET CHANGE IN CASH & BANK BALANCES (E 1-2) 2,105.24 196.28Notes:1. Cash & Bank Balances as at end of the year 2,608.53 503.29

Less: Other Bank Balances 776.37 1.37

Cash and Cash Equivalents 1,832.16 501.92

2. Cash and Bank balance includes ` 9.94 crore which are not readily available for use (refer Note-19).

3. Figures for previous periods have been regrouped wherever necessary for uniformity in presentation.

SMS CUSAT 28


SMS CUSAT 29

SUMMER INTERNSHIP REPORT –INDIAN OIL COORPORATION LIMITED

CHAPTER 4

PRODUCTS OFFERED BY IOC

The main products of Indian Oil are petrol, diesel, LPG, auto LPG, aviation turbine fuel,

lubricants and petrochemicals: naphtha, bitumen, kerosene etc. Indian Oil operates the largest and the

widest network of fuel stations in the country, numbering about 20,575 (16,350 regular ROs & 4,225

Kisan Seva Kendra). It has also started Auto LPG Dispensing Stations (ALDS). It supplies Indane

cooking gas to over 66.8 million households through a network of 5,934 Indane distributors.

Brands

1. Indane Gas - Domestic and Industrial Gas

2. AutoGas - Automotive Natural Gas

3. Xtra Premium - Automotive Premium Petrol

4. Xtra Mile - Automotive Premium Diesel

5. Servo - Lubricants and Greases

6. Propel - Petrochemicals

7. Indian Oil Aviation - Aviation fuel

8. LNG at Doorstep - LNG by cryogenic transportation

Indane Gas

Indane is today one of the largest packed-LPG brands in the world and has been conferred the

coveted ‘Consumer Superbrand’ status by the Superbrands Council of India.

Having launched LPG marketing in the mid-60s, Indian Oil has been credited with bringing about a

‘kitchen revolution,’ spreading warmth and cheer in millions of households with the introduction of

the clean and efficient cooking fuel. It has led to a substantial improvement in the health of women,

especially in rural areas by replacing smoky and unhealthy chulha. Indane is today an ideal fuel for

30


modern kitchens, synonymous with safety, reliability and convenience.

With the status of an exclusive business vertical within the Corporation, the Indane network delivers

1.2 million cylinders a day to the doorsteps of over 8.95 crore households, making Indian Oil the

second largest marketer of LPG globally, after SHV Gas of The Netherlands. Indane is available in

compact 5 kg cylinders for rural, hilly and inaccessible areas, 14.2 kg cylinders for domestic use, and

19 kg and 47.5 kg for commercial and industrial use.

LPG is a blend of Butane and Propane readily liquefied under moderate pressure. LPG vapour

is heavier than air; thus it normally settles down in low-lying places. Since LPG has only a faint

scent, a mercaptan odorant is added to help in its detection. In the event of an LPG leak, the

vapourisation of liquid cools the atmosphere and condenses the water vapour contained in it to form a

whitish fog, which is easy to observe. LPG in fairly large concentrations displaces oxygen leading to

a nauseous or suffocating feeling.

Suraksha LPG hose, flame retardant aprons and energy efficient Green Label stoves are

recommended to enhance safety measures while using LPG as cooking fuel.

Auto Gas

Auto Gas (LPG) is a clean, high octane, abundant and eco-friendly fuel. It is obtained from

natural gas through fractionation and from crude oil through refining. It is a mixture of petroleum

gases like propane and butane. The higher energy content in this fuel results in a 10% reduction of

CO2 emission as compared to MS.

Auto Gas is a gas at atmospheric pressure and normal temperatures, but it can be liquefied

when moderate pressure is applied or when the temperature is sufficiently reduced. This property

makes the fuel an ideal energy source for a wide range of applications, as it can be easily condensed,

packaged, stored and utilised. When the pressure is released, the liquid makes up about 250 times its

volume as gas, so large amounts of energy can be stored and transported compactly.

The use of LPG as an automotive fuel has become legal in India with effect from April 24,

2000, albeit within the prescribed safety terms and conditions. Hitherto, the thousands of LPG

vehicles running in various cities have been doing so illegally by using domestic LPG cylinders, a

very unsafe practice. Using domestic LPG cylinders in automobiles is still illegal.

31


The fuel is marketed by IndianOil under the brand name ‘AutoGas’

"IndianOil has setup 350 Auto LPG Dispensing Stations (ALDS) covering 192 cities across India."

AutoGas impacts greenhouse emissions less than any other fossil fuel when measured through

the total fuel cycle. Conversion of petrol to Auto Gas helps substantially reduce air pollution caused

by vehicular emissions.

The saving on account of conversion to Auto Gas in comparison to petrol is about 35-40%.

Low filling times and the 35-40% saving is a reason enough for a consumer to convert his vehicle to

AutoGas.

Natural Gas

Over the years, Natural Gas has emerged as the 'fuel of choice' across the world. It is steadily

replacing traditional fossil fuels due to its environment friendly characteristics which help in meeting

the stipulated automobile emission norms. Natural Gas has significant cost advantages over fuels

such as Naphtha and commercial LPG. Demand for Natural Gas in India is primarily driven by the

fertiliser and power sectors, which account for almost two-third of the country’s gas consumption.

Indian oil entered the Natural Gas business in 2004.Since then, by leveraging its inherent

strengths and countrywide reach, Indian oil has significantly enhanced its customer base. In the year

2013-14, it clocked total Natural Gas sales of 3.219 MMTPA (Million Metric tonnes Per Annum)

Indian Oil has co-promoted Petronet LNG Limited (PLL) for setting up LNG (Liquefied

Natural Gas) terminals at Dahej & Kochi. Indian Oil has marketing rights for 30% quantity of the

LNG procured by PLL from Ras Gas on long term basis at Dahej besides long term contract at

Kochi. Demand for Natural gas in India is growing and cannot be met by the current indigenous

production. Hence, Indian Oil is in the process of sourcing more quantities of LNG to meet the

increasing requirements.

Within the gas business, City Gas Distribution (CGD) is a rapidly growing segment. Green

Gas Ltd., IndianOil's joint venture with GAIL (India) Ltd., is already operational in Agra and

Lucknow in the state of Uttar Pradesh and is further expanding to cater to the increased demand in

32


various sectors. In an initiative to expand the CGD network, IndianOil has formed a consortium with

M/s Adani Gas Ltd. to develop CGD networks on pan India basis.

In Gas Transmission business, IndianOil owns and operates Dadri-Panipat Pipeline. IndianOil

has formed a consortium with GSPL and other OMC’s to build & operate Gas pipelines across the

country.

In a major step to increase Indian Oil’s presence in Natural Gas industry, Corporation is

currently implementing 5 MMTPA LNG import Terminal at Ennore near Chennai which is targeted

for completion during 2015-16.

Indian Oil is in the process of procuring LNG from world market on long term as well as

short term basis for meeting the Internal Consumption at our own Refineries and for Ennore LNG

Terminal.

Indian Oil has the capabilities to supply re-gassified LNG to customers presently located in

the Northern and Western regions of India. With the expansion of the pipeline network in Southern

region as well as other parts of the country, Indian Oil can supply gas to customers located near those

pipelines. As a committed supplier, Indian Oil is completely responsible for delivery of gas to the

customer’s premises. The transportation services of the company engaged in transportation of gas are

hired to ensure deliveries. This model is used world over wherein multiple gas suppliers operate

through one transportation system.

The “LNG at Doorstep” initiative involves making LNG available to the customers not

connected by gas pipeline. Gas is transported through a cryogenic system, stored in a cryogenic

holding tank at the target location and re-gassified on-site through vaporizers for use as fuel. The

entire operation being concealed eliminates the possibility of adulteration and pilferage. Introduced in

2007, this initiative has been well received and is attracting more customers located away from the

pipelines. Indian Oil has in-house capabilities in the manufacturing of Cryogenic equipment at the

“State of Art facility at Nasik” for the last three decades.

Petrol/Gasoline

Automotive gasoline and gasoline-oxygenate blends are used in internal combustion spark-

33


ignition engines. These spark ignition engine fuels are primarily used for passenger cars. They are

also used in off-highway utility vans, farm machinery and in other spark ignition engines employed

in a variety of service applications.

Gasoline is a complex mixture of relatively volatile hydrocarbons that vary widely in chemical &

physical properties and are derived from fractional distillation of crude petroleum with a further

treatment mainly in terms of improvement of its octane rating. The hundreds of individual

hydrocarbons in gasoline range from c4 to c11.

An oxygenate is an oxygen-containing, ashless organic compound (such as an alcohol or

ether) which can be used as a fuel or fuel supplement. Motor gasoline is sold at retail outlets where it

is directly delivered into the automobile tank. The Indian Standard governing the properties of motor

gasoline & gasoline-oxygenate blends is IS 2796: 2000 (3rd Rev).

The Indian Standard governing the properties of diesel fuels is IS 1460:2005 (5th Rev).

Important characteristics are ignition characteristics, handling at low temperature, flash point.

XTRAMILE

Indian Oil’s XTRAMILE Super Diesel, the leader in the branded diesel segment, is blended

with world-class multi-functional fuel additives. Commercial vehicle owners choose XTRAMILE

because they see a clear value benefit in terms of superior mileage, lower maintenance costs and

improved engine protection. A growing section of customers who own diesel automobiles, both in

the ‘lifestyle’ and ‘passenger’ category, prefer XTRAMILE as a fuel for its added and enhanced

performance. XTRAMILE has brought in a huge savings in the high mileage commercial vehicles

segment. Transport fleets that operate a large number of trucks crisscrossing the country are using

XTRAMILE to benefit from higher mileage and reduced maintenance costs.

ATF/Jet Fuel Indian Oil Aviation Service is a leading aviation fuel solution provider in India and the most-

preferred supplier of jet fuel to major international and domestic airlines. Between one sunrise and

the next, IndianOil Aviation Service refuels over 1500 flights – from the bustling metros to the

34


remote airports linking the vast Indian landscape, from the icy heights of Leh (the highest airport in

the world at 10,682 ft) to the distant islands of Andaman & Nicobar.

Jet fuel is a colorless, combustible, straight-run petroleum distillate liquid. Its principal uses are

as jet engine fuel. The most common jet fuel worldwide is a kerosene-based fuel classified as JET A-

1.The governing specifications in India are IS 1571: 2001 (7th Rev).

Indian Oil is India's first ISO-9002 certified oil company conforming to stringent global quality

requirements of aviation fuel storage & handling. IndianOil Aviation also caters to the fuel

requirements of the Indian Defence Services, besides refueling VVIP flights at all the airports and

remote heli-pads/heli-bases across the Indian subcontinent.

Indian Oil Aviation group regularly organises International Aviation conferences that act as a vital

information facilitator with participation from leading international and all domestic airlines, allied

industries, statutory aviation authorities and government agencies from over 35 countries.

Indian Oil is the only oil company in India to market the widest possible range of fuels used by

the aviation industry in India- JP-5, Avgas 100LL, Methanol Water Mixture, Jet A-1 and aviation

lubricants, etc.

Aviation Turbine Fuel (ATF) is dispensed from specially designed refuellers, which are driven

up to parked airplanes and helicopters. Major airports have hydrant refuelling systems that pump the

fuel right up to the filling outlets on the tarmac through underground pipelines for faster refuelling.

Essentially, ATF is pumped into an aircraft by two methods: Overwing and Underwing. Overwing

fuelling is used on smaller planes, helicopters, and piston-engine aircraft and is similar to automobile

fuelling - one or more fuel ports are opened and fuel is pumped in with a conventional pump.

Underwing fuelling, also called single-point is used on larger aircraft.

To ensure that you receive the best service, every one of our 101 AFSs follows specific quality

audits based on a Quality Control Index System benchmarked to global standards. In addition, 15

Quality Certification Laboratories provide complete specification tests round-the clock. Ensuring that

these standards are always upheld, there is a backup of a highly skilled, qualified and dedicated team

of officers and refueling crew. Indian Oil has a strategic partnership with Air BP, the world leader in

aviation business. Indian Oil regularly organizes seminars, symposiums and workshops to constantly

interact with its partners, which apart from being a two-way channel of communication, helps us to

35


stay abreast with advances in technology.

Diesel fuel often contains higher quantities of sulphur. In India , emission standards (equivalent to

Euro II, Euro III, Euro IV) have necessitated oil refineries to dramatically reduce the level of sulphur

in diesel in view of the auto fuel policy brought in force by Govt of India

BIS has brought out specification for "Diesel with 5% Biodiesel" that may be marketed in near

future.

SERVO lubricants & greases

SERVO brand, from IndianOil, is the brand leader among lubricants and greases in India and

has been conferred the “Consumer Superbrand” status by the Superbrands Council of India.

Recognised for its brand leadership by the World Brand Congress and as a Master Brand by CMO,

Asia, SERVO has now carved a significant niche in over 20 countries across the globe.

With over 1000 commercial grades and over 1,500 formulations encompassing literally every

conceivable application, SERVO serves as a one-stop shop for complete lubrication solutions in the

automotive, industrial and marine segments. Recognised for cutting-edge technology and high-

quality products, SERVO is backed by IndianOil's world-class R&D and an extensive blending and

distribution network.

The recent top-end offerings in the segment are all-new engine oils on a differentiated

synthetic platform—SERVO Futura Synth, a 100% synthetic premium lubricant for diesel & petrol

cars and SERVO 4T Synth, engine oil with advanced synthetic chemistry for 4-stroke two-wheelers—

represent a big leap in bringing technologically advanced motor oils of global standards to the Indian

market. Both the products offer outstanding engine protection and performance that far surpasses the

benefits offered by conventional mineral-oil based lubricants. (Please refer to the product sub-

segment on this website for product specifications and recommendations of the newly-launched

products).

In the retailing segment, besides IndianOil petrol stations, SERVO range of lubricants is

available through a network of a unique SERVO Stockist Management System (SSMS) across the

country. The products are available in every corner of the country through various retailing initiatives

like SERVOXPRESS stations, bazaar outlets and thousands of auto spare parts shops across the

36


country along with a unique concept of Gramin SERVO Stockists to reach the rural hinterland.

SERVOXPRESS vehicle servicing centres are one-stop shops for quick, easy and convenient

auto care, offering a refreshing experience to motorists. Opened in convenient locations like malls,

petrol pumps or as stand-alone units, SERVOXPRESS stations have facilities for engine oil change,

tyre & battery check-ups, air-conditioner service, vacuum cleaning, perfuming, upholstery cleaning,

polishing, lamination installation, etc., besides replacement of minor parts for two and four-wheeler

vehicles.

Lubrication is the art of reducing friction between rubbing or rolling surfaces. In the recent

past two terminologies have gained currency - Tribology, the science of Rubbing; Rheology, the

study of stream or flow. The earliest knowledge of lubrication is evident from grease lubricated

chariot wheels excavated from the ruins. The rapid development of this science can be said to have

started from the 18th century, with significant technological progress in commercial usage in the 20th

century. Most lubricants are liquids. Water is a natural lubricant but has extremely limited application

due to its very low viscosity and very low boiling point, besides its contribution to rusting and

corrosion. Vegetable oils have excellent lubrication properties but have very poor oxidation stability,

high pour point, rapid thickening and may even let out foul odours in time. Most of the liquid

lubricants used at present all over the world are petroleum-based mineral oils.

Marine Fuels & Lubricants

Indian Oil caters to all types of bunker fuels and lubricants required by various types of

vessels operating throughout the world in the shipping industry. Bunker supplies are made at all

major ports of India; Mumbai, Kandla, Vasco, Chennai, Tuticorin, Kakinada, Visakhapatnam, Kochi,

New Mangalore, Kolkata, Paradip, JNPT, Port Blair and Haldia. Apart from meeting 100% bunker

requirement of the Indian Navy, it also supplies bunker fuels to all major shipping and dredging

companies of India. Spot requirement of different vessels calling at Indian ports are met through

nominations received from local shipping agents and international bunker traders/brokers.

While IndianOil supplies Furnace Oil (FO) and High Flash High Speed Diesel (HFHSD)

meeting stringent BIS specifications, it also offers the entire range of SERVO brand marine grade

37


lubricants.

Supplies are made through pipelines, barges and tank-trucks. Bunker supplies are undertaken

through pipeline at specified jetties at Haldia, Vasco, Port Blair, Mangalore, Visakhapatnam,

Kakinada, JNPT (Mumbai) and Chennai. Tank trucks are used for bunker supplies at Tuticorin,

Paradip, Port Blair, Mangalore and Haldia. Barges are used for bunker supplies at jetties and inner

anchorages at Haldia, Mumbai, Kandla, Visakhapatnam, Kochi and Chennai.

Indian Oil has also started supplying Bonded 380 cst FO bunker fuel from Chennai from May

2009 as per ISO 8217:2005 specifications. The price of this product is internationally competitive

and revised on a weekly basis based on MOPS (Mean of Platts-Singapore).

Kerosene

Kerosenes are distillate fractions of crude oil in the boiling range of 150-250°C. They are

treated mainly for reducing aromatic content to increase their smoke point (height of a smokeless

flame) and hydrofining to reduce sulphur content and to improve odour, colour & burning qualities

(char value).

Kerosene is used as a domestic fuel for heating / lighting and also for manufacture of

insecticides/herbicides/fungicides to control pest, weeds and fungi. Since kerosene is less volatile

than gasoline, increase in its evaporation rate in domestic burners is achieved by increasing surface

area of the oil to be burned and by increasing its temperature. The two types of burners which

achieve this fall into two categories namely vaporisers & atomisers.

Bulk/Industrial Fuels

In the large volume consumer segment, IndianOil's provides complete Fuel Management

Solutions to customers who require fuels in bulk and have dedicated facilities for storage and

handling. These customers benefit from IndianOil's efficient sourcing and supplies matched to their

usage patterns and inventory. The optimization on and optimization of supplies is especially relevant

in the light of high-energy input costs in the recent past, which is expected to continue in the future

too. IndianOil's tankages are strategically located across the country and are custom-designed to

38


maintain low-cost supplies that can be rapidly transported through a sophisticated supply-chain

management system.

Whether it is an immediate need, a long-term supply contract or even setting up dedicated

storage and handling facilities at your premises, IndianOil's network is at your service.

IndianOil's marketing operations network of storage, distribution and supply hubs is backed

by on-time logistics and round-the-clock after-sales service. Many institutional customers like the

railways, steel plants, thermal power plants, textile mills, power plants, state transport undertakings,

large corporates and fleet & logistics companies tie-up for long-term contracts backed by IndianOil's

comprehensive fuel & lubricants consultancy-a formidable expertise that IndianOil has built over

nearly five decades of working with a cross-section of customers from a wide-range of industrial

sectors. IndianOil's bulk liquid fuel supply covers the complete gamut of fuels-Auto fuels, Light

Diesel Oil, Low Sulphur Heavy Stock, Special Products and much more.

Bitumen

Bitumen is a common binder used in road construction. It is principally obtained as a residual

product in petroleum refineries after higher fractions like gas, petrol, kerosene and diesel, etc., are

removed. Indian Standard Institution defines Bitumen as a black or dark brown non-crystalline soil or

viscous material having adhesive properties derived from petroleum crude either by natural or by

refinery processes.

IndianOil produces bitumen from its refineries at Panipat, Mathura, Koyali, Haldia and

Chennai and markets it in bulk as well as packed in steel drums. IndianOil also markets modified

Bitumen CRMB and Emulsion. CRMB is produced at Panipat, Mathura, Koyali, Haldia and CPCL

refineries. IndianOil markets Bitumen Emulsion by the brand name Indemul and it is produced from

emulsion plants located in Haldia.

General uses of Bitumen:

For civil engineering works

Constructions of roads, runways and platforms.

39


Water proofing to prevent water seepage.

Mastic floorings for factories and godowns.

Canal lining to prevent erosion.

Dump-proof courses for masonry.

Tank foundation.

Joint filling material for mason

Business Group (Cryogenics)

Business Group (Cryogenics) of Indian Oil Corporation Limited is a leading manufacturer

with over 30 years of experience in the design and production of state of the art vacuum super

insulated Cryogenic Storage & Transport Vessels with focus on products for long term Cryogenic

preservation of biological samples including a wide range of super insulated Liquid Nitrogen tanks

for Laboratories, Industries and Oil fields service applications and turn-key Cryobank management

systems with full automated controls. BG-Cryo is also catering to Pressure Vessels for application in

Refining, Fertilizer and Gas Industry.

BG-Cryo is one of the largest manufacturers of cryogenics containers in the country with

state-of-the-art manufacturing facilities, located at Nashik, Maharashtra. BG-Cryo is a ISO

9001:2008 certified unit of IOCL.

Indianoil's BG-Cryo has pioneered LNG at doorstep (LNG by road) concept in India and

facilities have been operational for almost a decade.

Petrochemicals

India is amongst the fastest growing petrochemicals markets in the world. Taking this into

consideration and to enhance its downstream integration, IndianOil is focusing on increasing its

presence in the domestic petrochemicals sector besides the overseas markets through systematic

expansion of customer base and innovative supply logistics.

Petrochemicals have been identified as a prime driver of future growth by IndianOil. The

Corporation is envisaging an investment of Rs 30,000 crore in the petrochemicals business in the

40


next few years. These projects will utilise product streams from the existing refineries of IndianOil,

thereby achieving better exploitation of the hydrocarbon value chain.

Beginning with a low-investment, high-value projects such as Methyl Tertiary Butyl Ether

(MTBE) and Butene-1 at Gujarat Refinery, Vadodara, IndianOil has set up a world-scale Linear

Alkyl Benzene (LAB) plant at Gujarat Refinery and an integrated Paraxylene/Purified Terephthalic

Acid (PX/PTA) plant at Panipat. A Naphtha Cracker complex with downstream polymer units is also

in operation at Panipat.

Crude oil Crude oil - as petroleum directly out of the ground is called - is a remarkably varied substance,

both in its use and composition. Crude oil is formed from the preserved remains of prehistoric

zooplankton and algae, which have been settled to the sea (or lake) bottom in large quantities under

anoxic conditions. It was formed over millions of years from the remains of tiny aquatic plants and

animals that lived in ancient seas due to compression and heating of ancient organic materials over

geological time. The oldest oil-bearing rocks date back to more than 600 million years, the youngest

being as old as about 1 million years.

Although various types of hydrocarbons - molecules made of hydrogen and carbon atoms -

form the basis of all crude oils, they differ in their configurations. The chemical structure of

petroleum is composed of hydrocarbon chains of different lengths. Because of this, petroleum may be

taken to oil refineries and the hydrocarbon chemicals separated by distillation and treated by other

chemical processes, to be used for a variety of purposes. It can be a straw-colored liquid or tar-black

solid. Red, green and brown hues are not uncommon.

Crude oil is classified by the location of its origin (e.g. West Texas Intermediate, WT, Brent,

Dubai or Minas) and often by its relative weight or viscosity (light, intermediate or heavy); refiners

may also refer to it as `sweet’, which means it contains relatively little sulphur, or as `sour’, which

means it contains substantial amounts of sulphur and requires more refining in order to meet current

product specifications. The number of carbon atoms determines the oil's relative `weight’ or density.

Gases generally have one to four carbon atoms, while heavy oils and waxes may have 50, and

41


asphalts, hundreds.

Crude oil from an area in which the crude oil's molecular characteristics have been determined

and the oil has been classified are used as pricing references throughout the world. These references

are known as Crude oil benchmarks

CHAPTER 5

SERVICES OF IOCL5.1Refining

Refinery Inspection Services

Indian Oil has full-fledged Inspection Departments in all its refineries, comprising qualified

mechanical/metallurgical engineers, to monitor the health of static equipment. Its R&D Centre also

offers support in conducting detailed health assessment of units. The Centre has state-of-the-art

facilities for carrying out health assessment and material failure analysis.

A thorough inspection of all equipment, along with specific, elaborate inspection of critical

equipment, can also be carried out using visual and non-destructive techniques such as thermography

and radiography. If required, the Applied Metallurgy Group of the R&D Centre conduct micro-

structural analysis to assess the health of equipment. The facilities available include microscopic

examination, chemical analysis by alloy analyser, scanning electron microscopy, in situ

metallography, micro-hardness testing, etc. Based on the inspection studies, recommendations are

made for short-term and long-term remedial actions.

Indian Oil's inspection teams have a deep understanding of the complexities of all the process

units of modern refineries and can offer comprehensive inspection services of a highly professional

nature.

Training & Development Services

Building human competence and a motivated workforce is one of the key strengths of Indian

42


Oil. Its pool of professionals, with excellent faculty members, regularly update their knowledge and

skills in the areas of refining, marketing, pipeline transportation, R&D and general management.

Their portfolio is enriched with academic inputs as well as hands-on field experience. The Indian Oil

Institute of Petroleum Management (IIPM), located at Gurgaon near Delhi, is the Corporation's apex

learning institute supported by 18 training Centers spread across India.

The skilled manpower offers full support to clients in training their workforce through

specialised programmes in various facets of the downstream petroleum sector. Many nations,

including Bahrain, Iran, Iraq, Kenya, Kuwait, Libya, Madagascar, Malaysia, Nepal, Nigeria, Oman,

Qatar, Sri Lanka, Sudan, Tanzania, Yemen and Zambia, have already benefited from such tie-ups,

which may include on-the-job training.

Indian Oil offers faculty assistance for "tailor-made" training programmes that suit the

requirement of refinery or pipelines personnel or a selection of programmes from the clients" training

calendar.

5.2 Pipeline

Project Management

Indian Oil's Pipelines Division provides services in the field of project management. The

clientele includes the existing pipelines companies and companies venturing into pipelines business.

The services provided in the area of Project Management are:

Project management consultancy to ensure timely completion of pipeline projects within

approved cost with international quality standards

Techno-economic feasibility study of new crude oil and multi-product pipelines

Detailed design, engineering of mainline, stations, offshore terminals, tank farm, cathodic

protection, etc.

Engineering, Procurement and Construction (EPC) services for implementation of Pipeline

Projects Instrumentation, dedicated telecommunication system including optical fibre

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communication and Supervisory Control And data Acquisition system

Vendor selection, procurement of materials and award of work contracts

Construction supervision

Construction supervision, testing and commissioning

Build, Own, Operate and Transfer (BOOT) contracts for cross country pipeline and terminals

Natural gas and Liquefied Petroleum Gas pipelines

For existing pipelines, we offer services in project management in respect of capacity

augmentation, revamping and de-bottlenecking

Indian Oil's expert group of engineers located in different parts of the country deliver the services

offered above. The customers can contact the Executive Director (Projects) for project-related

services.

5.2.2 Operation and Maintenance

Indian Oil's Pipelines Division provides services for operations and maintenance. The

clientele includes the existing pipelines companies and companies venturing into pipelines business.

The services provided for Operations and Management are:

Cross country crude and multi-product pipelines

Mainline engines, pumps and motors

Station facilities, crude oil and petroleum product tanks

Automation and advanced control systems

Single Point Mooring (SPM) Systems, submarine pipelines

Development of maintenance procedures, formats, schedules, manuals

Corrosion monitoring and control

Technical audits for better performance of energy consumption, quality, safety and

environment protection

Onsite and offsite disaster management plans

Selection, testing and evaluation of Chemical Drag Reducers and corrosion inhibitors

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Indian Oil's expert group of engineers located in different parts of the country deliver the services

offered above. The customers can contact the Executive Director (Operations) for operation-related

services.

Training and Development Consultancy

Indian Oil's Pipelines Division provides consultancy services in training and development.

The clientele includes the existing pipelines companies and companies venturing into pipelines

business.

The consultancy services provided in Training and Development are:

Specially designed training programmes to cater to the specific business needs

Operations and maintenance of mainline engines, pumps and pipelines

Electrical and instrumentation systems

Single Point Mooring operations and maintenance

Pipeline construction and commissioning

Operations and maintenance of telecommunication and SCADA system

The services offered above are delivered by Indian Oil's expert group of engineers across the country.

For training of personnel by Indian Oil's experts, the customers may contact Dy. General Manager

(Training & Development).

Cross Country Pipeline Management

With its first pipeline laid in the early 60s, IndianOil is a pioneer in crude oil & product

pipelines in India. The cross-country pipelines network has now extended to over 11,214 km, with

two Single Point Mooring (SPM) systems.

Indian Oil’s Pipelines team has vast experience and expertise in techno-economic feasibility

45


studies, design & detailed engineering, project execution, operation, maintenance and consultancy

services for areas such as capacity augmentation, modernisation, etc. Proven project tools and

techniques are used in project management to ensure high-levels of quality, productivity, time

schedule and cost control.

The sophisticated Supervisory Control and Data Acquisition (SCADA) and Applications

Software is used in all stages of project implementation, right from inception to completion,

including field services, maintenance and operations support. Tanker handling, crude oil/product

accounting, quality control, ocean loss control, pigging procedure development & analysis of pigging

data, selection/testing and evaluation of drag reducers, O&M of tank farm/pump stations, are the

other areas of expertise for which the Pipelines team offers consultancy services.

5.3 Technology Licensing

Indian Oil's world class R&D Centre, established in 1972, has delivered pioneering results in

lubricants technology, refining process, pipeline transportation, bio-fuels and fuel-efficient

appliances.

Over the past three decades, IndianOil R&D Centre has developed over thousands of

formulations of lubricating oils and greases responding to the needs of Indian industry and

consuming sectors like Defence, Railways, Public Utilities and Transportation. The Centre has also

developed and introduced many new lubricant products to the Indian market like multigrade railroad

oils.

Indian Oil has a basket of technologies in the areas of lubricants and grease formulations,

fuels, refining processes, biotechnology, additives, pipeline transportations, engine evaluation,

tribiological and emission studies, and applied metallurgy.

The R&D Center’s activities in refining technology are targeted in the areas of fluid catalytic

cracking (FCC), hydroprocessing, catalysis, reside upgradation, distillation simulation and modeling,

lube processing, crude evaluation, process optimization, material failure analysis and remaining life

assessment and technical services to operating units.

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CHAPTER 6

TRAINING AND DEVELOPMENT

"If one advances confidently in the direction of his dreams, and endeavors to live the life

which he has imagined, he will meet with success unexpected in common hours" - Henry David

Thoreau

Training builds high morale in an employee by developing positive attitude, job satisfaction,

enhanced earnings, job security. Training leads to optimum use of resources and zero waste which

increases productivity and helps to minimize cost of operations per unit. It also leads to economic use

of materials and machinery.

Management Training helps in crisis Management and highlights ways which can enable a

corporation to reach greater heights. Training develops self reliant and well motivated employees,

they need less guidance and control therefore burden on supervisors is reduced.

By adopting right work methods and making use of prescribed safety devices employees reduce

accident rate. It also enables effective communication and dealings with both customers and

employees.

The Indian Oil Institute of Petroleum Management, the 'Temple of Learning', as we call it, is

a centre of excellence for nurturing future leadership, situated on the outskirts of New Delhi. It

conducts advanced management education programmes in collaboration with premier business

47


schools and top line professionals.

To ensure that every employee is working with the same corporate vision and goals in order

to be successful in the Corporation, Various orientation programs for new employees are held.

Orientation provides an opportunity for new employees to become acclimated to their new

company, department, colleagues and work expectations.

Indian Oil operates 18 training centres across the country for up-skilling, re-skilling and

multi-skilling of employees in its pursuit of corporate excellence.

Indian Oil has been serving as a source of technical support and expertise to petroleum

companies of carious countries across the globe.

CHAPTER 7

SWOT ANALYSIS OF IOCL

Strength

1. India's largest commercial enterprise with a strong brand

name

2. Has around 50% petroleum products

3. Operates 10 refineries in India

4. Huge distrubtion network through retailing

5. Accounts for a 47% share in the petroleum products market, 3.

4.8% share in refining capacity and 67% downstream sector

pipelines capacity in India

6. Has over 35,000 employees

7. Loyalty programs like XTRAPOWER Fleet Card Program is

aimed at Large Fleet Operators

1.Legal issues

2.Employee management

48


Weakness3.Bureaucracy

4.Volatility in the crude market & subsidy burden

Opportunity1.Increasing fuel/oil prices

2.Increasing natural gas market

3.More oil well discoveries

4.Expand export market

Threats1.Government regulations

2.High Competition

CHAPTER 8

MAJOR COMPETITORS OF IOCL

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50


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CHAPTER 9

LOYALTY PROGRAMS

Loyalty programs are structured marketing efforts that reward, and therefore encourage, loyal

buying behavior — behavior which is potentially of benefit to the firm.

Earning customer loyalty goes beyond gaining customer satisfaction. Loyal Customers evangelize the

brand by sharing their satisfactory experience with their friends and colleagues. A great product or

service is the starting point for customer loyalty. Great marketers architect loyalty programs from day

one.

Loyalty programs are initiated by businesses with two main goals. The primary goal for most

loyalty programs is the acquisition of information relating to their customers' spending habits, while

the secondary goal is to actively cultivate loyalty amongst customers to ensure they continue

patronizing the business. While some companies do reverse these priorities, the above hierarchy

holds true for most.

Loyalty programs may offer benefits in a number of different ways. Many loyalty programs

offer a sustained discount (such as 10%) for a period of time - perhaps a year, perhaps for the life of

the business. Others offer a discount once certain criteria have been met — for example, a 20%

discount on a single purchase once a customer has spent Rs 2000 at the business. Still others offer

points which may then be redeemed for products which may or may not be directly related to the

business.

Loyalty cards are the most common form of loyalty programs found throughout the world today.

Some of the first loyalty programs were instituted by airlines in the 1970s in the form of frequent

flyer miles. In these loyalty programs, one accrues points by flying on the airline and then 'cashes in'

the points in exchange for tickets, upgrades, or even third-party benefits. In the past decade, many

nonairline businesses have combined their own loyalty programs with those of the airlines, offering

frequent flyer miles in exchange for everything from telephone usage to purchasing gasoline.

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Loyalty programs have gained in popularity immensely in the past fifteen years, in no small

part due to the development of a culture of entitlement, in which consumers feel that they deserve

special treatment. Businesses have capitalized on this when designing their loyalty programs, often

offering benefits that cost little, but carry with them an assumed prestige, such as access to faster-

moving lines or special parking spaces.

Ultimately, the success of loyalty programs depends on how well the business uses the data it gathers

to further refine its policies and loyalty programs. Many businesses find little profit in the use of

loyalty programs, while others, such as eBay, attribute much of their financial success to a well-

executed use of such programs.

Loyalty Programs an Integral Part

The immense competition will make loyalty programs an integral program of the day-to-day

functioning of petro-retailing. Of course, right now many such loyalty programs are being run by the

petro-retailers like Smart Fleet (BPCL), Xtra Power (IOCL), Drive track (HPCL), and Petro card

(BPCL). However, these programs are mainly focused at the bulk consumers and the small

consumers are left unnoticed more or less. But in future, there won‘t be such differentiation and

loyalty programs will be there for every segment of consumers.

Customer Relationship Management and Loyalty program

Customer Relationship Management (CRM) can be widely defined as:

Company activities related to developing and retaining customers. It is a blend of internal business

processes: sales, marketing and customer support with technology and data capturing techniques.

Customer Relationship Management is all about building long-term business relationships with

customers.

Most CRM initiatives begin with a strategic need to manage the process of handling customer related

information more effectively. For beginners it could simply mean better lead management

capabilities or sales pipeline visibility. However, as organizations mature in their CRM initiatives,

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they begin to look at CRM as tool to acquire strategic differentiators. Despite the immense benefits

that the CRM solutions can deliver, they are not entirely without their share of problems.

Loyal customers are more profitable. Any company will like its mindshare status to improve from

being a suspect to being an advocate. Company has to invest in terms of its product and service

offerings to its customers. It has to innovate and meet the very needs of its clients/ customers so that

they remain as advocates on the loyalty curve.

An important facet of CRM is ―customer selectivity‖. As several research studies have shown not all

customers are equally profitable (In fact in some cases 80% of the sales come through 20% of the

customers). The company must therefore be selective and tailor its program and marketing efforts by

segmenting and selecting appropriate customers for individual marketing programs. In some cases, it

could even lead to ―outsourcing of some customers‖ so that a company better utilize its resources on

those customers it can serve better and create mutual value.

With growing competition in the petro-retailing sector, today‘s consumer is becoming more and more

demanding. The emergence of new psychographic segments in petro retail market bears the

testimony to this fact. A closer look at these segments tells us what exactly a consumer is looking for

whenever he goes to a fuel station to purchase fuel.

He looks for-

Quality & Quantity assurance

Quick filling and efficient forecourt service

Rewarding loyalty

Premium fuels

Cashless transactions

Non - fuel services.

XTRAPOWER Fleet Card program

The XTRAPOWER Fleet Card program is a complete smart card-based fleet management solution

for fleet operators and Corporate for cashless purchase of fuel & lubes from designated retail outlets

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of Indian Oil through flexible pre-paid and credit facilities.

The fleet card program also offers an exciting rewards program and unique benefits like personal

accident insurance cover and vehicle tracking facilities. In just under two years of its launch, Indian

Oil‘s XTRAPOWER Fleet Card has emerged as the largest fleet card in the country with the widest

retail outlet coverage.

Any business entity owning or operating a vehicle fleet can become a member of the XTRAPOWER

fleet card program at a nominal annual charge. Each fleet owner is issued a Fleet Control Card and

vehicle-specific Fleet Cards for every vehicle enrolled under the program.

For enhanced security, the fleet card transactions are authorized through unique Personal

Identification Number (PIN). Moreover, the card can help track each vehicle's movement across

remote corners of the country leading to an improvement in vehicle utilization and route compliance.

XTRAPOWER is also backed by Indian Oil‘s vast infrastructure network and web-based support

services.

XTRAPOWER is one-of-a-kind fleet card program of Indian Oil, which gives you XTRA

convenience, XTRA security and XTRA opportunity to earn Truckload of rewards. It is a tailor-made

program for Fleet Owners, Operators & Corporate as well. Xtra Power Fleet Card program is a step

of IOC towards building loyalty among the existing customers. Loyalty program works only when

the customer is emotionally attached to the brand.

Positioning of the loyalty program is very critical so that these benefits do not appear to be a just

discount under the garb of loyalty this greatly affects the customer retailer relationship and greatly

reducing the program to a pure commercial transaction where the customer constantly looks for

deals.

We need to enroll the right customers. We can recognize the highest value Customers to recognize

and reward their value to our organization, we can Cultivate high potential customers who currently

split their purchases between us and our competitors or reach out to those most at risk of churning.

Knowing which customer groups are most important to us allows crafting recognition and rewarding

strategy that piques their interest.

Customers should be involved in the program by constant communication to make them understand

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what is in for them. Comprehensive surveys should be conducted to find out what should be the ideal

way to reward the loyal customers and retain them for the life time. Activities like checking point

balances online, responding to targeted offers, using kiosks, bidding on auction items, entering

sweepstakes and so on. Such participation is a sure sign of increasing value to the customers.

Benefits of IOCL fleet card

Better credit proposition.

Higher value of reward points.

Attractive rewards program.

Personal accident insurance and medi-claim cover for the card member, drivers, co-drivers &

helpers.

Lost card liability cover.

Online PIN unblocking.

Flexible cash loading options - Manual Reload & CCMS Reload (Remote loading of cards by

depositing lump sum cash at one place) or CCMS reload thru' cheque payment at select

HDFC branch.

Card-insert based vehicle-tracking facility thru' website (Offline tracking free, Online tracking

at a nominal charge of Rs.2/-).The online tracking details are immediately made available to

the card members on XTRAPOWER website.

Special discounts from our alliance partners (currently available on JK Tyres only)

Round the clock Customer Helpline Number 1800 425 55 99 (Toll Free) or STD no. 044-

6551498.

9.1 Xtrapower fleet card features

Convenience

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Largest Network of Retail Outlets pan India (Including very remote and rural locations)

Cashless transactions

Instant MIS

Easy Online Fleet Management

Easy Cash Flow Management – CCMS Recharge

RTGS / NEFT / Online funds transfer or Pay at Pump

SMS Alerts for transactions

Manage fleet account by SMS

24 X 7 Toll free Helpline

24 X 7 XTRAPOWER Service Centers to assist your crew

Generic Card Option

No need to wait – Ready to use - OTC Cards available for instant fleet management

8.5.2 Secure

Well Established & Robust Program

Smart Card technology, Password controls for every transaction

Control of entire fleet

Branch level controls

Insurance – Social Security

8.5.3 Rewards

Cost Savings – Improve operational efficiency

Instant Redemption Option

Instant Fuel Redemption at Retail Outlet

Exciting gift options

8.5.4 Value added services

Free Exclusive Health Check Ups for your Truck crew

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Expert guidance on choosing retail outlets to derive state specific cost advantages

Dedicated Key Account Managers for large fleet operators

Credit facility through Credit Partners

Customized, Auto generated MIS for large accounts

Comparison of loyalty card benefits of other companies

Name of the company

IOCL BPCL HP

CARDS

REWARD POINT ON

DISEL AND PETROL

.4% .3% .3%

Cash loading Manual and by cental cash management(free)

Manual and by cental cash management(free)

Manual and by cental cash management(free)

Online pin unlocking

Yes(free of cost) Yes(free of cost) Yes(free of cost)

INSTANT FUEL REDEMPTION

YES YES YES

INSURANCE FOR OWNER

Rs.1,00,000/- per card, max up to Rs.20,00,000/-

NO ANY INSURANCE FOR OWNER

NO ANY INSURANCE FOR OWNER

INSURANCE FOR DRIVER

Driver : 50,000/-Co-Driver : 25,000/-

NO ANY INSURANCE BENEFITS

Free accidental death Insurance cover of Rs. 1

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AND CLEANER Helper-cum-cleaner : Rs.25,000/-

Lakh for drivers and 1 Lakh for cleaners.

MEDICAL INSURANCE

(Rs.10, 000/- per card): Owner: Rs.2500/- per card subjected to maximum of Rs.50, 000/-, Driver: Rs.2500/-, Co-Driver: Rs.2500/- and Helper-cum-cleaner: Rs.2500/-. *(Minimum claim under medical insurance MUST be over Rs.500/-

NO ANY MEDICAL INSURANCE

NO ANY MEDICAL INSURANCE

Up to Rs 16000/per car subjected to misuse 24 hrs after lodging loss complain to Xtra power 24hrs help line.

NO SUCH BENEFIT NO SUCH BENEFITLOST CARD LIABILITY INSURANCE

LOST CARD LIABILITY

A replacement card is issue to the card holder after due verification the pre paid amount balance of the lost card is transferred with a fee of Rs 100 per card.

A replacement card is issue to the card holder after due verification the pre paid amount balance of the lost card is transferred after verification.

A replacement card is issue to the card holder after due verification the pre paid amount balance of the lost card is transferred after verification.

VEHICLE TRACKING

Card-insert based offline tracking at no extra cost. Card insert based online tracking at a nominal cost of Rs.2/-

Card-insert based offline tracking at no extra cost. Card insert based online tracking at a nominal cost. Vehicle tracking through sms (fee only for blue card holder).

Card-insert based offline tracking at no extra cost. At any HP Fleet card outlet, the driver has to place the card on the reader and enter his PIN Number. This is regardless of whether or not your Driver fuels the vehicle at the outlet. Card insert based online

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tracking at a nominal cost.

SMART CARD PREPAID CREDIT

YES YES YES

MULTIPLE CREDIT PARTNER

(Currently, Sundaram Finance Ltd.)

SundaramFinanceLtdCiticorp FinanceIndusInd Bank

ICICI BANK

RELOADING FACILITY

YES YES YES

ENORLMENT FEE AND RENWAL FEE

YES , RS 100 PRE CARD

YES ,RS 250 PER CARD

NA

LOYALTY POINT VALUE

PER POINT 1 PAISA NA NA

REWARD FUEL AND LUBE

YES YES YES

MINIMUM POINT REQUIRED FOR REDEMPTION

80,000-1 year from the date of transaction.

9, 00, 000 - once in year (for blue and silver) quarterly for gold and on demand for platinum card holder.

25,000-at any point of time valid up to 3 years.

REDEMPTION OPTION THROUGH CRT MACHINE

YES YES YES

24 HRS HEELPLINE

YES YES YES

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TYRE AND BATTERYBENEFIT

On JK tyre per tyre Rs 100 less and 5 % off on Exide battery

NO SUCH BENEFIT NO SUCH BENEFIT

SMS BENIFIT NO SUCH BENIFIT Free sms alerts for all balance check and vehicle tracking (fee only for blue card holder).

NO SUCH BENEFIT

From this comparison it is clear that benefits provided by iocl is better than its competitor inspite of

this to get more customer the company can consider for benefits such as,

Free sms alert as provided by bpcl for balance check and vehicle tracking

Extra benefit scheme for customer with more transaction.

Multiple credit partner for customers

Redemption at any point of time with increased point validity from 1 year.

Fleet card vehicle for smaller vehicle.

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Sl.NO.

QUESTIONNAIRE

Name of the customerAddress

1) What types and how many diesel vehicles you have? (in numbers)a. CAR d. HCVb. LCV e. BUSc. MCV

2)What is your diesel requirement per tank?

3) Are you filling regularly from IOC? YES/NO

4) Are you aware of XTRAPOWER fleet card of IOC? YES/NO

5) If YES , do you have an XTRAPOWER fleet card? YES/NO

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DESCRIPTIVE ANALYSIS OF AN

OPERATIONAL PROBLEM FACED BY

THE ORGANISATION AND SUGGESTING

SOLUTION


6) How did you come to know about the product?a. Media c. Hoardingsb. Retail Outlet d. others

7) How long have you been using this?a. less than 1 year c. More than 2 years

b.1-2 years

8) i Do your vehicles fuel from outside Kerala? YES/NOii If YES how many litres in a month?

a. < 500 c. > 1000b. 500 - 1000

9) According to you please rate the product in the following features in the scale of one to five?(1 : Best 5:Worst)

a. Convenienceb. Securityc. Ease of Usaged. Controle. Rewards

10) What are the additional features you want in this card ?a.b.c.

Sample Population

1. Customers of retail outlets of IOCL

2. Drivers who engage in transportation of products for construction purposes

3. Drivers who transport products from one state to another

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4. Customers with small vehicles.

Sample Size : 216 numbers

Place of conducting research : Kochi (Kerala)

Findings

Are you filling regularly from retail outlets of IOCL?

YES No0%

10%20%30%40%50%60%70%80%90%

77%

33%

PERCENTAGE

RE-SPONSE

Almost 77% of the customers of IOCL were regularly filling from the retail outlets of IOCL.

33% of the customers of IOCL are not its regular customers. They also preferred other retail

outlets as well.

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Are you aware about the xtrapower fleet card of IOCL?

YES No0%

10%

20%

30%

40%

50%

60%

70%

35%

65%

PERCENTAGE

RE-SPONSE

35% of the customers were alone aware of the xtrapower fleet card whereas 65% of the customers were unaware of this loyalty program. 65% also included drivers of small companies which had one / two HCVs

If yes, do you have xtrapower fleet card?

YES No0%

10%20%30%40%50%60%70%80%90%

20%

80%

PERCENTAGE

RE-SPONSE

Among the 35% of the customers who were aware of the xtrapower fleet card, only 20% of the customers were using this facility.

The major reasons:

1. The entire system seemed so complex (for 80%)

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2. There is no proper information available to customers about the fleet card (for 90%)3. Customers faced technical difficulties while using the cards. This was also the reason as to

why some cards remained idle after the customers purchasing them.4. Small transporters (45%) were not very keen about the program.

How did you come to know about the xtrapower fleet card?

Media Hoardings Retail Outlets Others0%

10%20%30%40%50%60%70%80%90%

100%

10%5%

90%

30%

PERCENTAGE

RE-SPONSE

The main source of information about the loyalty program was through retail outlets which constituted 90% as information providers to customers.

30% of the customers received information through various other sources such as word – of – mouth, internet etc.

Media played a very poor role in providing information (only 5%) and so did hoardings (only 10%)

How long have you been using this?

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Less than 1 year 1 - 2 years More than 2 years0%

10%

20%

30%

40%

50%

60%

70%

30 %

66 %

14 %

PERCENTAGE

TIME PE-RIOD

66% of the customers have been using this program for 1-2 years; 20% of the customers have been using the loyalty program for less than 1 year, which means IOCL has been successful in gaining trust of the customers.

This data also reveals the reluctance of the customers at the initial stage, as only 14% of the customers were using this facility since its introduction.

Do you fuel vehicles from outside Kerala?

Only 30% of the customers were filling from outside Kerala. 70% of the customers were having all their operations within Kerala.

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YES No0%

10%

20%

30%

40%

50%

60%

70%

80%

30 %

70 %

PERCENTAGE

RE-SPONSE

If yes, how many litres do you fill in a month from outside Kerala?

< 500 500 - 1000 > 10000%

10%

20%

30%

40%

50%

60%

70%

80%

10 %

70 %

30 %

PERCENTAGE

in litres

Majority (i.e. 70%) of the customers who were filling from outside Kerala were filling 500 – 1000 litres.

Only 10% of the customers filled less than 500 litres and only 30% above 100 litres.

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Level of satisfaction based on various factors

CONVENIENCE SECURITY EASE OF USAGE CONTROL REWARDS0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

70 %90%

10%

40%30%

PERCENTAGE

RE-SPONSE

Out of the people who used xtrapower fleet card:

90% was happy with the security these cards offered. 70% felt it to be convenient Only 10% felt it easy to use 40% were interested in the control facility 30% were happy with the benefits

Additional features customers like to be incorporated in the fleet card program:

10% customers felt they need some special benefits as they had and continued to have large transactions

45% of the customers were having small vehicles. They received no benefits. So they proposed a need to include the benefits for small vehicles as well.

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75% of the customers preferred to receive information about their reward points through SMS facility.

35% of the customers wanted to receive SMS relating to the balance amount in their card when they sent SMS to some number.

Complaints of customers

30% of the customers complained that card swiping machines are not properly maintained at some places.

40% of the customers were unhappy as pump attendants at some places were not interested in providing this service.

90% customers said that they had lack of information about the operations and benefits of the xtrapower fleet card.

20% had complaints that there were no dedicated person for collecting the forms. So, there is a backlog of forms.

60% of the customers felt people at retail outlets didn’t know much about the program and they provided information’s which were often misleading.

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XTRAPOWER DRIVER CARD SALIENT FEATURES

Name of Card: XTRAPOWER Driver Card –Spot Enrolment

Incentive points - 30 points per rupee 100 purchases – 1

Point = 1 Paisa.

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Routine work given by the organization -


15 points to be debited to the Merchant concerned, 15 points to be borne by the

Corporation.

Completed Application Form including Mobile Number,Vehicle No. along with copy of

Commercial Driving , License for enrolment of Driver card

Additional incentives to the Drivers on the occasion of Independence Day, Republic Day,

Driver’s Birthday, Driver’s Marriage Anniversary and Drivers’ Day - 1000 points- borne by

the Corporation.

Cost of each card of Rs.50/- to be recovered from Merchant.

Option for Merchants to recover the cost of the card fromthe driver.

Merchant has facility to request for Driver Card, create Driver’s Profile and mapping of

Driver Card in the XP Site with their Login ID and Password.

Driver Card not to be issued to those drivers, who are driving vehicles, for which the vehicle

specific /generic cards have already been issued.

Merchant to control the transactions either on Driver card or on vehicle specific/generic

card of the Transporter.

Transaction of Cash Reload and Cash Sale to be done mostly, CCMS sale is also possible

( Minimum Rs.500/- and multiples of Rs.100/- ).

There is no expiry date for Driver card.

Minimum Reward Points for redemption of fuel 10,000.

Reward Point Redemption through CCMS Re-charge-

Driver has to send SMS for Reward Point Redemption from registered Mobile No to Mob

No.9223301330.

SMS Format : REDEEM<space<Customer ID<space>reward Points

Replacement of lost card/issue of duplicate card will be with redemption of reward Points

i.e. Rs.50/- per card.

Accidental Death Insurance Coverage of the Driver - Rs.1.00 Lac.

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