Estimating the energy consumption of Indian refineries: an empirical analysis based on panel data econometrics

Abstract

The oil refinery sector is regarded as the leading energy-consuming industry that shares 33.1% of the total energy consumption in industrial sectors in India. Therefore, the present study estimates the actual energy consumption by using panel data of 12 Indian oil refineries for the period from 2011-2012 to 2016-2017. Using pooled OLS, fixed and random effect models, feasible generalised least squares and panel-corrected standard error models the study observed that that distillate yield, high sulphur crude processed, refinery age and refinery structure (dummy variable) are significant and positively affected to specific and actual energy consumption. Therefore, policies should be adopted for judicious use of these variables to reduce energy consumption in Indian refineries. The study recommends that Indian refiners have to adopt waste heat recovery, flare gas recovery, overall site heat integration and best operating practices to reduce energy consumption.