Indian Oil (IOC) to Spend USD 4.46 Billion on Expansion of the Panipat Refinery Capacity

To meet the soaring demand for petroleum products in India, oil marketing giant Indian Oil has planned to increase the capacity of its Panipat refinery from 15 million metric tonnes per annum (MMTPA) to 25 million metric tonnes per annum (MMTPA) by September 2024.

The expansion drive would include the establishment of a catalytic dewaxing and Polypropylene (PP) unit at the company’s Panipat refinery located in Haryana. The total project cost would be around INR 329.46 billion (USD 4.46 billion).

Within India, the company’s Panipat refinery caters to the growing demand of petroleum products in Haryana and north-western India including Punjab, J&K, Chandigarh, Uttarakhand, Himachal Pradesh, and some parts of Rajasthan, Uttar Pradesh and Delhi. As per IOC, the move would not only help in upscaling the domestic manufacturing of petrochemicals and other value-added specialty products but also protect the company’s margins through mitigating the risks associated with its conventional fuel business.

During the quarter ending December, IOC reported more than two-fold increase in its operating profits led by strong inventory gains. The company’s net profit rose to INR 49.165 billion compared to INR 23.390 billion. The company’s product sales volume, including exports, was totalled at 23.033 million tonnes and its refining throughput was nearly 17.86 million tonnes. IOC recorded combined operating rate of 101% on an average in December for all its nine standalone refineries.

IOC, along with its subsidiary Chennai Petroleum Corporation Ltd. (CPCL), has hold over nearly one-third of the country's 5 million-barrels-per-day (bpd) refining capacity. To increase the country’s self-sufficiency, oil minister Dharmendra Pradhan is also putting efforts to increase the capacity of IOC’s Haldia refinery which has a capacity of 160,000 bpd by seeking 175 acres of land in the eastern part of West Bengal.

As per ChemAnalyst,” India’s massive import bill creates a huge room for the companies to conduct refinery expansions. The country is the world’s third largest importer and consumer of fuel as of now, and with its oil demand anticipated to double by 2040, the scope for the Indian refiners is likely to multiply. This will not help India meet its continuous growing energy demand but will also help the country to improve its GDP and extend new opportunities for the downstream players.”