The Oil Industry ( Development) Act,1974 was enacted following successive and steep increase in the international prices of crude oil and petroleum products since early 1973,when the need of progressive self-reliance in petroleum and petroleum based industrial raw materials assumed great importance.

Preamble to the Oil Industry (Development) Act clarifies that the purpose of the Act is to provide for the establishment of a Board for development of oil industry and for that purpose to levy duty of excise on crude oil and natural gas and for matters connected therewith.

The OIDB is body corporate having perpetual succession and a common seal, with power to acquire, hold and dispose of property, both movable and immovable, to the contract, and shall by the said name sue and be sued.For details please refer to OIDB Act No.47 of 1974.