BackIndian Oil plans to invest ₹1 tn over the next 4-5 years
This comes in the backdrop of India’s largest refiner planning to add another 25 million tonnes per annum (MTPA) to its current refining capacity of 80.2 MTPA
PremiumNew Delhi: Indian Oil Corp. Ltd plans to invest ₹1 trillion over the next four to five years, chairman Shrikant Madhav Vaidya said in his speech at the 62nd annual general meeting of India’s largest refiner on Friday.
Indian Oil plans to add another 25 million tonnes per annum (mtpa) to its current capacity of 80.2 mtpa.
“Speaking about India’s energy future and the related opportunities, forecast 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 coexist," Vaidya said. “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 (mmpta), including CPCL (Chennai Petroleum Corp. Ltd), and an investment commitment of close to ₹1 trillion over the next 4 to 5 years."
Indian Oil, which expects domestic demand for diesel to reach pre-covid-19 levels by Diwali, has a 32% share of the domestic market. This assumes importance given that energy consumption, especially electricity and refinery products, usually linked to overall demand in the economy.
“With the recovery in overall demand, refining and other related operational parameters have demonstrated an even more pronounced turnaround compared to the previous year," he added. “For the first quarter of this fiscal year, Indian Oil achieved a refinery run of 88.6% as compared to 68.5% in Q1 of FY21. 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."
As per rating agency ICRA Ltd, petrol and diesel consumption in India is expected to grow by 14% and 10%, respectively, in FY22. India is a key refining hub in Asia, with an installed capacity of over 249.36 mtpa. It has 23 refineries and seeks to grow its capacity to 400 mtpa by 2025.
Indian Oil is expanding its petrochemical business in view of growing demand. It is in talks with Russia’s largest integrated petrochemicals firm PJSC SIBUR Holding to set up a large petrochemical facility in India, Mint had reported 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 maximization," Vaidya said.
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