Indian Oil Corporation (IOCL) PESTLE Analysis
Detailed PESTLE analysis of Indian Oil Corporation (IOCL) examining political, economic, social, technological, legal & environmental factors.
Political Factors:
Indian Oil Corporation (IOCL) is an Oil and Gas company headquartered in new Delhi. It is public corporation with government holding 52% shares. These factors impact the profitability of company which are not in control of the business. A level of taxes would reduce the revenue of the company. Indian government puts heavy taxes on the petrol and diesel which make the price of these high and thus reduces the demand of these products by the people. The government of any countries plays very important role in its petroleum industry. The government have now decreased the duties it has put on the automobiles to increase its demand. This may be very beneficial for the petroleum industry, as in future it may lead to increase in demand of petrol and diesel.
Image: company website
This concludes the political factors in the Indian Oil Corporation (IOCL) PESTLE Analysis.
Economic Factors:
Below are the economic factors in the PESTLE Analysis of Indian Oil Corporation (IOCL):
Due to covid-19 petroleum industry have hit very hardly. As the demand of the automobile is very less and also people prefer to stay at their home only due to this pandemic.
It has really impacted the revenue of the IOCL and now company is into loss due to pandemic. Also, government of India is continuously increasing duties on the oil to increase its revenue, to address the problem of rising fiscal deficit. High inflation in the country have also adversely impacted the oil industry. The company operates in 11 of India’s 23 refineries, so it is major player in the oil industry and its revenues has really affected due to this pandemic.
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Social Factors:
Following are the social factors impacting Indian Oil Corporation (IOCL) PESTLE Analysis:
We all know the India is second most populated country in the world. The oil demand of the country is very high and we have to import great amount of oil very year, which increases the import bill of the country significantly. Due to covid the demand of the oil has decreased as people now prefer to stay at home and various other reasons. But in future when the things will become normal the oil industry has got huge potential which can be very useful for the Indian Oil corporation. As the lifestyle of the people of India is getting impacted by the western culture, more and more people now have their personal cars and bike. People prefer less to travel in public transport, this have really increased the demand of the petrol and diesel.
Technological Factors:
The technological factors in the PESTLE Analysis of Indian Oil Corporation (IOCL) are mentioned below:
These factors include innovation in technology and in the ways of producing goods which affects the operations of the industry. These factors cannot be ignored by the company as these plays very important role in ensuring long term profitability of any company. As Indian Oil Corporation is public company, the company spends huge amount of money in research and development. This investment is very important for the entire country as this may result in reducing our country dependency on the oil imports.
The company has ventured into alternative energy and has cross country pipeline network for transporting the crude oil to the refineries.
Legal Factors:
Following are the legal factors in the Indian Oil Corporation (IOCL) PESTLE Analysis:
These factors include various internal and external laws which company must follow. Legal analysis includes analyzing of laws of the country and then making strategies according to it. With environment norms becoming more stringent in India, company need to keep check on its carbon emission as oil industry is often criticized for polluting the environment. The company have also taken various steps to ensure the safety of its employees keeping in mind the health and safety laws of the country. Also, IOCL have started supplying BS-6 fuel as instructed by the government of the India.
Environmental Factors:
In the Indian Oil Corporation (IOCL) PESTLE Analysis, the environmental elements affecting its business are as below:
Environmental factors play crucial role in building brand image of any company. These factors become most important in the industries like oil industry.
The government keep close check on the gaseous emissions and solid waste of oil companies. In Indian Oil Corporation, many engineers are working together continuously to develop and use productive methods for improvement of environmental effects. Also, the company have various cleanups program that improve refinery process of the company and also taken initiatives to control oil spills in the sea to save marine life.
To conclude, the above Indian Oil Corporation (IOCL) PESTLE Analysis highlights the various elements which impact its business performance. This understanding helps to evaluate the criticality of external business factors for any brand.
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