Downstream

Imagine the river has finally reached the sea. Downstream is that final stretch of the oil and gas value chain, where crude oil is refined into usable products, petrol, diesel, jet fuel, LPG, and then marketed and sold to the actual consumer through petrol pumps, gas agencies and industrial supply contracts.

India's downstream sector is dominated by a handful of large refiner marketers, Indian Oil Corporation, Bharat Petroleum, Hindustan Petroleum and Reliance Industries, which together run a national refining capacity of about 258 million tonnes per annum as of FY25, among the largest in the world. Downstream profitability is captured through two separate numbers investors track closely, GRM for the refining margin and marketing margin for the retail fuel business, and the two can move in completely opposite directions in the same quarter.

When you fill petrol at a pump, you are transacting entirely in the downstream world. Everything that happened before that, finding the crude, shipping it, refining it, is upstream and midstream work you never directly see.