New Delhi: India’s largest oil-refining company, the Indian Oil Corporation (IOC), will spend Rs56,000 crore over the next five years on expanding its refining and other programmes. The company wants to expand its capacity from 60.2 million tonnes per annum of crude to 76.7 million tonnes per annum. While most of the money will come from the company’s internal accruals, some of the amount will be raised as debt.
“Around Rs30,000 crore will be spent on our greenfield Paradip refinery, Rs6,000 crore on the upgrading of our Gujarat refinery, and Rs14,000 crore on our new naphtha unit at Panipat,” a senior IOC executive told Mint.
IOC also plans to spend Rs3,000 crore each on its Haldia refinery in West Bengal and quality-improvement programmes at various otherrefineries across the country. The Paradip refinery will add 15 million tonnes per annum to its capacity, while the expansion at the Haldia unit will add another 1.5 million tonnes per annum.
Currently, India has a refining capacity of 149 million tonnes per annum of crude, and IOC has a 40.4% share of the business. The company earns a refining margin of between $5 and $6 for every barrel of crude it processes. IOC is also seeking overseas partners for its naphtha cracker complex in Panipat in Haryana.
India’s refinery capacity was 119.86 million tonnes per annum in 2003-04 and increased by 6.25% to 127.36 million tonnes per annum in 2004-05. It further increased to 132.46 million tonnes per annum in 2005-06.