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How is the Petroleum Industry of India Affected By Bitcoin?

Staff Reporter
How is the Petroleum Industry of India Affected By Bitcoin?
(Photo : Kanchanara via Unsplash)

The Petroleum Industry of India is facing increasing crude oil prices, fluctuating exchange rates, and the rising cost of production because the Indian Rupee is not a very strong currency. Bitcoin may be one solution to the Problem faced by the petroleum industry of India to become more efficient and profitable. If you are interested in bitcoin trading then open account today with Bitcoin Circuit

The Petroleum Industry of India is one of the largest industries in the country, which is the energy sector, and it accounts for almost 8% of world oil demand. Indian Oil Corporation Limited(IOCL), Bharat Petroleum Corporation Limited(BPCL), and Hindustan Petroleum Corporation Limited(HPCL). Out of them, Indian Oil Corp. Ltd. is the leading petroleum company in India.

9 Ways how bitcoin benefits the Indian petroleum industry

1. International transactions will be cheap, fast, and efficient with bitcoin because the transaction fees are meagre compared to other modes of international trade.

2. There is no need to have a bank account or any documentation for receiving payment in bitcoin.

3. Transparency in the system provides a complete audit trail that gives full visibility of financial information, making it easier to keep track of money transactions.

4. It will essentially remove the exchange rates related risks involved in the business because there is no third party or bank involvement.

5. No no borders for the payment system, which means that once a bitcoin is sent from one person to another person across the globe within minutes, there are few chances that it can be stopped or blocked by any authority.

6. Comparatively low transaction fees for international transactions compared to other conventional money transfer methods.

7. Minimising the role of intermediaries by providing a peer-to-peer method that is more beneficial for the petroleum industry, small-scale industries, and developing countries like India.

8. It will create awareness among people about the cryptocurrency, and it may make them familiar with bitcoin, which may contribute to its widespread adoption.

9. Develop a robust framework for developing countries like India, where the economy is primarily based on cash transactions because it will help in the digital evolution of the Indian economy.

10. Reducing dependency on centralised organisations like banks, clearinghouses, and governments to perform transactions.

10 Negatives of bitcoin that can affect the petroleum industry of India

1. Volatility makes it risky for the Indian petroleum industry if they have contracts regarding the number of units or dollars spent because bitcoin value can change by 5-10% within days.

2.No legal framework for cryptocurrency if the government may ban its use, so there are chances that businesses using cryptocurrency will face legal issues.

3. Inability to use bitcoins as a currency means it can't be used for directly purchasing goods and services from merchants, so there is no need to have bitcoin wallets or any other digital mediums of exchange.

4. Absence of regulatory body because since India has not accepted cryptocurrency as a legal tender, there may be no regulatory authority to check fraudulent activities associated with cryptocurrency.

5. Illegal use of bitcoin because criminal organizations and terrorist networks may use it for carrying out illegal activities like money laundering and financing terrorist networks, which may affect the petroleum industry in India.

6. No insurance is available for bitcoin wallets or cryptocurrencies if they get lost, and there is no legal recourse available for getting them back.

7. No legal recognition from the government, which means there may be no rights available for cryptocurrency owners to take legal actions against those who damage their cryptocurrencies.

8. False sense of anonymity because all transaction details are stored on a public ledger containing every transaction ever processed. The identity of users behind those transactions can be traced back to anyone with an internet connection.

9. Risk of getting hacked because the entire cryptocurrency will get lost if the wallet gets hacked, and there is no way to recover it without proper authorization or legal recognition.

Conclusion:

Bitcoin has both positive and negative effects on the petroleum industry of India. Bitcoin presents many opportunities for business persons involved in oil and gas production, exploration, and distribution. Still, it also offers a risk for them because since there is no regulatory authority, available bitcoin can be used for carrying out illegal activities which affect the petroleum industry.

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