Indian Oil Corp.'s Panipat oil refinery will get a $2.3 billion upgrade over six years to meet domestic demand for energy, according to Sanjiv Singh, IOC's refineries director.
Singh, who will become IOC's chairman next year, said the plant's capacity was slated to increase to 20.2 million metric tons a year (500,000 barrels a day) from the current 15 million ton rate, but instead, the facility will refine 25 million metric tons of crude annually by 2022.
"Fuel demand growth has been very strong and India's excess capacity is very small," Singh said in New Delhi. "We have to keep adding capacities."
The IOC runs 11 of India's 23 refineries, which churn out 80.7 million metric tons of oil every year, according to The Economic Times.
As India's middle class grows, more citizens are buying cars and motorcycles, causing demand to spike upwards. Russia and Saudi Arabia compete to supply fuel to India, and local refiners have begun constructing new facilities.
Last Wednesday, India's government approved two stake purchases by a consortium of Indian companies of Russian oil fields worth a combined US$3.2 billion.
The acquisitions will boost India's oil supplies, which is in line with the country's goal of adding high-quality international assets to its Exploration & Production (E&P) portfolio in order to increase energy security, the government said.
In 2015, India's fuel consumption rose by 11 percent - a growth rate four points higher than that of China. Both Asian giants also consume massive amounts of coal, which does not bode well for the environment.
Still, India demonstrated its commitment to fight climate change when it ratified the Paris Climate Change Agreement on 2 October - Mahatma Gandhi's birthday.
In related news, India's state-run Oil and Natural Gas Corporation (ONGC) announced a US$5.1 billion (340.12 billion rupees) investment over the next four years for the development of a deepwater oil and gas block off India's east coast.
By Zainab Calcuttawala for Oilprice.com
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Zainab Calcuttawala is an American journalist based in Morocco. She completed her undergraduate coursework at the University of Texas at Austin (Hook’em) and reports on… More