IOC to invest USD 6 billion in refinery upgrades

Indian Oil Corporation (IOC), India’s largest state-owned refiner, plans to invest INR 40,000 crore (USD 5.9 billion) to expand its refining capacity to 104 million tonnes per year by 2022 to meet the country’s projected fuel requirements. Currently, IOC’s refining capacity is 80.7 million tonnes per year.

“All the projections clearly show that the demand will grow and unless we start investing now, we will lag,” said Sanjiv Singh, IOC director (refineries), in an interview with PTI.

The International Energy Agency’s World Energy Outlook is projecting India’s fuel demand to grow by 4% on a compounded annual growth rate (CAGR) basis, with fuel demand growing from 184 million tonnes in 2015-2016 to 348 million tonnes by 2030.

India’s total oil refining capacity is currently 232.06 million tonnes.

To retain its market leadership, IOC is looking to upgrade its Koyali refinery in Gujarat to 18 million tonnes per year, from the current 13.7 million tonnes. The Panipat refinery in Haryana also will be upgraded to 20.2 million tonnes, from the current 15 million tonnes. The 15-million-tonne Paradip refinery in Odisha, which was commissioned in February, will be upgraded by 5 million tonnes. The Mathura refinery in Uttar Pradesh and Barauni refinery in Bihar will each be upgraded by 3 million tonnes, boosting their capacity to 11 million tonnes and 9 million tonnes, respectively.

Other state-owned refiners are planning capacity upgrades as well to meet the projected rise in fuel demand in India.