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Indian Oil Corp. expects India’s diesel demand to hit pre-covid levels by Diwali

IOC Phinergy Private Limited has been formed between IndianOil and the Israeli company Phinergy, to commercialise Aluminium-Air battery technology for the original equipment manufacturers in India.  (Priyanka Parashar/Mint)Premium
IOC Phinergy Private Limited has been formed between IndianOil and the Israeli company Phinergy, to commercialise Aluminium-Air battery technology for the original equipment manufacturers in India.  (Priyanka Parashar/Mint)

  • IOC plans to add another 25 million tonnes per annum (MTPA) to its current refining capacity of 80.2 MTPA. India is a key refining hub in Asia, with an installed capacity of over 249.36 MTPA

New Delhi: The country’s largest fuel retailer Indian Oil Corporation Ltd expects India’s diesel demand to reach pre-covid levels by Diwali this year.

This was articulated by IOC chairman Shrikant Madhav Vaidya in his speech at the 62nd annual general meeting of the PSU and assumes significance given that IOC is India’s largest refiner with a 32% share of the domestic market.

“Let me also add that with the recovery in the overall demand, refining and other related operational parameters have demonstrated an even more pronounced turnaround compared to the previous year," Vaidya said.

“For the first quarter of this fiscal, Indian Oil achieved a refinery run of 88.6% as compared to 68.5% in Quarter 1 of FY 2020-21. As I say this, the sales volume of petrol has already crossed pre-covid level, with diesel likely to reach there in the next 2-3 months, say by Diwali," Vaidya added.

This comes at a time when the country’ petrol and diesel consumption is expected to grow by 14% and 10% respectively in FY22, according to rating agency ICRA. 

IOC plans to add another 25 million tonnes per annum (MTPA) to its current refining capacity of 80.2 MTPA. India is a key refining hub in Asia, with an installed capacity of over 249.36 MTPA. It has 23 refineries and plans to grow its refining capacity to 400 MTPA by 2025.

“Speaking about India's energy future and the related opportunities, forecasts by various agencies see Indian fuel demand climbing to 400-450 million tonnes by 2040 from the present 250 million tonnes. This offers enough legroom for all forms of energy to co-exist. In fact, to cater to that demand surge, we are aggressively rolling out new projects. These translate into refining capacity expansion of over 25 million metric tonnes per annum (MMTPA), including CPCL, and an investment commitment of close to one lakh crore over the next 4 to 5 years," Vaidya said.

Vaidya also spoke about Indian oil Corp’s focus on the expansion of its petrochemical business against the backdrop of a growing demand for petrochemicals in the country. IOC is in talks with Russia’s largest integrated petrochemicals firm PJSC SIBUR Holding for a partnership to set up a large petrochemical facility in India as reported by Mint earlier.

“To strengthen our company's long-term future, we are focusing on optimally integrating current refining processes to yield more chemical products per barrel of oil. This will intensify Petrochemical and Lubricant integration leading to a diversified product portfolio and attain profit maximisation," Vaidya said.

Vaidya also spoke about the energy major’s push towards green fuels and electric mobility in the backdrop of India’s emissions have been reduced by 28% over 2005 levels, against the target of 35% by 2030.

“In the electric mobility sector, the ‘IOC Phinergy Private Limited’ has been formed between IndianOil and the Israeli company Phinergy, to commercialise Aluminium-Air battery technology for the original equipment manufacturers in India. Leading automobile companies have shown keen interest in the technology and prototype integration, and field trials are expected to commence soon," he said.

There is also a growing interest in India’s push for developing a battery storage ecosystem that involves setting up 50-gigawatt hour (GWh) manufacturing capacity for advance chemistry cell batteries by attracting investments totaling 45,000 crore.

“You would appreciate that while the Energy Aatmanirbharta is going to be the fundamental tenet to power our economic march, balancing environmental priorities will be critical for a sustainable future. In this context, the rollout of the National Hydrogen Mission by the Hon’ble Prime Minister is crucial, as it aims to make India a hub for producing and exporting green Hydrogen," Vaidya said.

In a push for India’s energy security, Prime Minister Narendra Modi in his Independence Day speech announced a National Hydrogen Mission for the country. This comes in the backdrop of India spending 12 trillion annually to meet the energy needs.

Green hydrogen is produced by splitting water into hydrogen and oxygen using an electrolyzer powered by electricity from renewable energy sources such as wind and solar can be a game changer for India, which imports 85% of its oil and 53% of gas.

“To strengthen our bouquet of clean energy offerings, IndianOil will build the nation's first 'Green Hydrogen' plant at Mathura Refinery," Vaidya said.

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