Pestel Analysis of HPCL (Hindustan Petrolium)

PESTEL ANALYSIS OF HPCL (Hindustan Petroleum)
Political Factors
 For HPCL’s operations to run effectively, the country's government
policies must be stable.
 Government decisions in foreign affairs also have a significant influence
on the HPCL's operations.
 The dispute between the United States and Iran forces HPCL to depend
on crude oil from other nations at greater rates. The company's activities
are also influenced by the policies of the crude oil producing countries.
Economical Factors
 The decline in the activities of various industries due to the COVID-19
pandemic has had an influence on HPCL's operations.
 The government has raised the tax on petrol. The government also
decreases the subsidy granted to LPG users. These policies have an
influence on the company's operations.
 COVID-19 pandemic have resulted in worldwide and national lockdowns
and demand reduction as a result of generally slow global economic
activity. This, along with the oil-producing countries' inability to achieve
an agreement to rebalance the supply-demand imbalance, resulted in
unanticipated volatility in crude oil and product prices.
 The High Oil prices have contributed to the widening of the Current
Account Deficit.
Socio-Cultural Factors
 People's lifestyles change as a result of urbanisation and the convenience
of operation, and they are consider owning a vehicle for their family. The
manner these cars are used has also changed in recent years. The growth
in demand for crude oil in the country in the pre-pandemic period was
caused by this shift in patterns.
 Since the COVID-19 pandemic, people have minimized the use of public
transport and preferred using private vehicle which has increased petrol
and diesel usage.
 In the tough COVID-19 times, HPCL has placed a specific emphasis on
preventative and curative measures for the health of its workers and
extended workforce.
 HPCL offers well-equipped health care facilities / arrangements in all
major cities. HPCL's core area is occupational health, and all
occupational health concerns are treated completely.
Technological Factors
 The new technologies boost the company's operations for discovering
crude oil and constructing oil pipelines. Technology also consists of
procedures used to obtain crude oil and refine it for domestic use.
 The emergence of Electric Vehiles has influenced the market for diesel
and petrol automobiles. Because of the quick improvement in
infrastructure for Electric Vehicles, more customers are considering them
as an alternative to traditional petrol or diesel automobiles.
 It should also use AI, IoT, and ML to enhance its supply chain.
Environmental Factors
 HPCL is devoted to conducting business with a strong emphasis on
environmental preservation, sustainable development, a safe work
environment, and the enhancement of the quality of life of workers,
customers, and the community. Established processes and procedures are
continually changed in order to attain greater levels of safety,
occupational health, and environmental protection.
 Emissions of pollutants in the refineries like SO2 have been drastically
reduced from 60 TPD in 1984 to less than 25 TPD now, in spite of
capacity increase from 4.5 MMTPA to 13 MMTPA and addition of
various secondary processing and lube producing facilities.
 HPCL pioneered environmentally beneficial technology such as
switching from Phenol to NMP solvent in three lubricant extraction units
and switching from Oleum to NMP in the Hexane Treating Plant, which
were well praised.
Legal Factors
 HPCL operates in a number of states, each with its own set of rules. The
company must follow the norms and regulations of the jurisdiction in
which it operates.
 It should also take into account the diesel and petrol tax rates in each
state.
 Permissions for logistics should also be obtained by the company.
 The firms supply petrol and diesel through dealers. As a result, it must
adhere to the agreements established with the dealer.
Ethical Factors
 Throughout its existence, HPCL has maintained key characteristics such
as absolute transperancy, honesty, and responsibility.
 HPCL's commercial ties with its various domestic and foreign contractors
and suppliers of products and services are continually guided in a well-
thought-out direction, with high transparency and ethical standards
serving as guiding lights in the transaction process.

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