Bold Reforms Vital To Sustain Growth
Jayanta Ray, GM Industrial and OEM, GS Caltex India Pvt Ltd., shares his insights on challenges the oil sector has to overcome due to the ongoing pandemic and revival plans to minimise its impact. The oil industry, which is the
Jayanta Ray, GM Industrial and OEM, GS Caltex India Pvt Ltd., shares his insights on challenges the oil sector has to overcome due to the ongoing pandemic and revival plans to minimise its impact.
The oil industry, which is the cornerstone of global economy is witnessing its lowest ever point owing to the powerful footprint of Covid-19 pandemic, leading to major collapse in demand.There is no doubt that the current pandemic has caught the industry unaware and most of them are now awaiting cautious roll-back of restrictions to minimise the impact.Laying emphasis on this fact, Jayanta Ray, GM Industrial and OEM, GS Caltex India Pvt Ltd. opines, “Almost all segments of the industry like metals, chemicals, power, Off-Highway, auto manufacturing and auto components, general engineering and process industries and contracts have come under the ambit of Covid-19.”
The once in a century phenomenon is posing immense challenges to the oil industry. In such a scenario, having a contingency plan in place is difficult. Divulging the plans to overcome the situation, Ray adds, “Post lockdown, our plan is to continue servicing our esteemed customers and help them generate the demand with joint marketing activities. Most of the industry would focus on savings and controlling expenditure where we plan to support them through our innovative service program by offering world-class Kixx branded lubricants. We are also focussing on more touchless operations and creating robust digital connect programs in post lockdown scenario.”
India has been fortunate enough to enjoy the benefits of reduced crude oil prices in the international market. This in turn will help the Government to revive its tax earnings, keeping fuel prices constant for retail customers. “The Indian government raised excise duty of Diesel by Rs 13/L and Petrol by Rs 10/L in the first week of May, which is quite a significant hike. The revenue generated from these duties will be used for infrastructure and other developmental items of expenditure,” reveals Ray.
The strict lockdown enforcement and inevitable restrictions has not helped the oil industry either. To cope with the scenario, precautionary measures have been put in place. The Government has permitted staggered opening up of essential industries in mining, telecom, construction and few other sectors to keep the demand alive. However, since the opening up is gradual, it will have a significant impact on the GDP in FY 21.“Different Government measures will support the contraction and help the industry to get back to moderate growth by end of Q4 FY 21. The government is also taking adequate steps to help industries re-emerge from the after-effects of the virus. Coupled with opening of different sectors, the central government has announced a 20 Lakh Crore package which covers almost all segments of our local manufacturing and industry. I am hopeful that bold reforms will push the demand further and will be back to normal after few quarters. Liquidity in market will also play a key role in boosting demand,” says Ray.
As predicted by Kline, in FY 21 Indian Lubricants Industry is staring at a contraction between 6% to 23% which of course will crawl back to its normal in 2 to 3 quarters. “Our plan is to stay ahead of the industry curve by focussing on segments which are expected to do better post lockdown,” concludes Ray.
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