India ranks sixth in the world in terms of petroleum demand and by 2010, India is projected to replace South Korea and emerge as the fourth-largest consumer of energy, after the United States, China and Japan. Most of the country's 19 refineries, barring two, with a capacity to process about 160 million tonnes per year are run by state-run companies.

The country's crude oil output for the financial year ended March 2007 was up 5.6 per cent to 33.98 million tonne (mt) compared with 32.19 mt in the previous fiscal. During the same period, the country produced 31.55 billion cubic metres (BCM) of natural gas.  India is dependent on imports for nearly 70 per cent of its petroleum requirements.

IOC, BPCL and HPCL are losing around Rs 13 for every litre of diesel they sell and around Rs 11 for every litre of petrol amounting to over Rs 450 crore of daily retail losses from subsidised fuel sales.

Raising diesel prices by even 50 paise per litre would

 help cut retail losses by around Rs 54 lakh per day for

IOC alone, the company official said.

One barrel of crude oil [158.9 litres] at the oil well in west asia costs around $15-20 per barrel

Refining cost = $ 5 globally for complex crudesobtained through tar sands refining costs could top $15 per barrel.

So who are the real winners ??

The central and state governments make more money from the sale of petroleum products every time the crude oil price goes up, the govt takes away over 50 percent of the price we pay in taxes around Rs23 over every litre of petrol. Estimated to be a US$ 110 billion industry, the Indian oil and gas industry is among the largest contributors to the central and state exchequers in India. Its share approximates US$ 13.58 billion.

**During 2005-06, refinery throughput at 130.11 million tonnes was up 2.1 per cent from 127.42 million tonnes in the previous year. During April-December 2006, the throughput was 107.42 million tonnes.