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India’s state-held oil refiners are planning to spend as much as US$27 billion (2 trillion Indian rupees) on raising the country’s refining capacity, junior oil minister Rameswar Teli told Parliament on Wednesday.
India, the world’s third-largest crude oil importer, hopes to lift its refining capacity by 20 percent by 2025 over its current refining capacity of around 5 million barrels per day (bpd).
“The refining industry has been modernized and upgraded continuously with the indigenous and imported technologies for refining cost reduction,” Teli told lawmakers in a written reply to questions, as carried by Reuters.
India is also investing in nearly doubling by 2025 its petrochemical production capacity from the current 3.2 million tons annually.
State-owned Indian Oil Corporation (IOC), the largest oil refiner in the country, looks to boost its crude oil refining capacity by one-third over the next half-decade as it believes that gasoline and diesel demand will continue to rise in India, IOC’s chairman Shrikant Madhav Vaidya told Bloomberg last month.
“I firmly believe all forms of fuel will have a place to stay -- fossil fuels will be there,” Vaidya told Bloomberg in an interview published in July.
“Consumption is going from leaps and bounds and energy security is the primary concern for me, which may not be the concern to the developed world,” IOC’s top executive said.
IOC is investing US$13 billion in its capacity expansion, which will raise its crude oil processing capabilities to as much as 2.15 million bpd.
IOC operates 11 of India’s 23 refineries and has a 51-percent share of crude and product pipelines (by length) and 42-percent of all retail fuel outlets, Fitch Ratings said in mid-July, when it affirmed IOC’s rating at BBB-.
IOC’s strategy continues to be based on the demand for fossil fuels, unlike that of oil-to-telecoms conglomerate Reliance Industries. In June, chairman Mukesh Ambani said that Reliance Industries plans to invest more than US$10 billion over three years in a new business unit that will build solar module, battery storage, electrolyser, and fuel cell factories.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.