Indian Oil Corp will spend about Rs400bn ($6bn) to boost capacity by almost 30% in the next six years to feed the booming fuel demand in the world’s second-most populous nation.
“Fuel demand is rising and India’s excess capacity is very small,” Sanjiv Singh, director of refineries at India’s biggest processor, said in an interview on Friday. “We all need to expand if demand sustains.”
The expansion comes as Indian refiners are racing to add capacity amid rising fuel consumption. India is poised to surpass Japan as the world’s third-largest oil user this year and will be the fastest-growing crude consumer in the world through 2040, Paris-based International Energy Agency estimates.
The state-run company aims to increase its capacity to about 104mn metric tonnes a year, or about 2mn barrels per day, over the next six years by expanding the existing refineries across the country, said Singh.
Indian Oil currently can process 80.7mn tonnes of crude a year from its nine plants and two owned by its unit Chennai Petroleum Corp, accounting for 35% of the nation’s total, according to its website.
India’s oil demand is forecast to reach 329mn tonnes by 2030, according to IEA. The country’s 23 refineries have a total capacity of 230mn tonnes a year, while total fuel demand was 183.5mn tonnes during the financial year that ended March 31, according to the oil
ministry. “In another 15 years, India should be adding another 100mn tonne refining capacity,” Singh said. “By 2030, India would easily cross as much as 340mn-ton capacity.”
Separately, Indian Oil is working with the government as well as other refiners to build a 60mn-tonne-a-year refinery on the west coast. The proposed project, which would include petrochemical units, may cost about Rs2tn, Singh said. They will build the refinery in two phases, with two crude units totalling 40mn tonnes in the first phase and a third one in the second phase, he said. “After getting possession of the land, it will take five to six years to complete the first phase,” he said.
Indian Oil to boost capacity by almost 30% in the next six years to feed the booming fuel demand in the world’s second-most populous nation.
