An Efficiency Analysis of Selected Indian Oil and Gas Companies: A Window DEA Approach

Afjal, M., & Ahmad, M. I. (2018). An Efficiency Analysis of Selected Indian Oil and Gas Companies: A Window DEA Approach. IUP Journal of Applied Economics, 17(4).

Posted: 25 Jun 2019 Last revised: 23 May 2022

See all articles by Dr. Mohd Afjal

Dr. Mohd Afjal

Vellore Institute of Technology (VIT) - VIT Business School; VIT Business School, Vellore Institute of Technology, Vellore

Mohd. Izhar Ahmad

Aligarh Muslim University (AMU) - Department of Economics

Date Written: October 1, 2018

Abstract

The present study examines the Overall Technical Efficiency (OTE), Pure Technical Efficiency (PTE) and Scale Efficiency (SE) of six sample companies – Bharat Petroleum Corporation Ltd. (BPCL), Hindustan Petroleum Corporation Ltd. (HPCL), Indian Oil Corporation Ltd. (IOCL), Oil and Natural Gas Corporation of India Ltd. (ONGC), Oil India Limited (OIL) and Reliance Industries Ltd. (RIL) – selected from the oil and gas sector. These companies account for the major portion of India's total oil and gas production. The data have been collected from the Prowess database and annual reports of the selected companies. The study covers a period of 27 years, i.e., from 1991 to 2017. The Data Envelopment Analysis (DEA)-based Window DEA Approach has been applied by conceptualizing one output and three inputs to analyze the technical and scale efficiency of the selected oil and gas companies. The empirical results show that the highest OTE, PTE and SE are recorded by ONGC and OIL, while the lowest OTE, PTE and SE are recorded by BPCL and HPCL. None of the companies is operating at most productive scale size. The inefficiency is attributed to managerial inefficiency and inappropriate choice of the scale size. The study highlights the need for concrete steps on the part of policy makers to choose the appropriate scale size and to eliminate managerial inefficiency.

Keywords: Window DEA, Technical and scale efficiency, Indian oil & gas companies

JEL Classification: C5, L7, L25

Suggested Citation

Afjal, Mohd and Ahmad, Mohd. Izhar, An Efficiency Analysis of Selected Indian Oil and Gas Companies: A Window DEA Approach (October 1, 2018). Afjal, M., & Ahmad, M. I. (2018). An Efficiency Analysis of Selected Indian Oil and Gas Companies: A Window DEA Approach. IUP Journal of Applied Economics, 17(4)., Available at SSRN: https://ssrn.com/abstract=3406642

Mohd Afjal (Contact Author)

Vellore Institute of Technology (VIT) - VIT Business School ( email )

Flat 9133, Sobha Meritta, Pudupakkam
Kelambakkam Vandaloor Main Road
TN 603103

VIT Business School, Vellore Institute of Technology, Vellore ( email )

132, VIT Business School, Gandhi Block, VIT Vellor
Vellore, TN Maharashtra 632014
India
09012355712 (Phone)

Mohd. Izhar Ahmad

Aligarh Muslim University (AMU) - Department of Economics ( email )

Aligarh
India

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