New Delhi: State-run Indian Oil Corporation (IOC) is reviewing its refinery expansion plans in the backdrop of a rise in the usage of cleaner fuels and is also looking to leverage its growing petrochemical operations to shield its balance sheet from the vagaries of the oil market, said Indian Oil Chairman and Managing Director SM Vaidya on Monday. Vaidya told the media during a press conference that as far as grassroots projects are concerned, we are reviewing all projects.
In 2018, India had projected a growth of 77 percent in refining capacity to 9 million barrels per day (bpd) by 2030. However, the Petroleum Planning and Analysis Cell (PPAC), is now revising the supply and demand scenario for the country. Vaidya said that based on the study, Indian Oil will revise its refinery expansion plan, including that of Paradip refinery.
At a recent Asia Pacific oil summit, Vaidya had said that the company was targeting to expand its petrochemical business because it will give the company the ability to de-risk from lower refining margins. The Indian Oil Chairman also added that the petrochemical expansion plan would look into entering niche areas with a possibility of forward integration into textile business.
Indian Oil is expanding its petrochemical capacity by more than 70 percent from its current 3.2 million tonnes a year.
The IOC Chairman also said that if the current surge in fuel demand continues, then auto fuel demand in India should reach pre-COVID levels in a quarter. He added that Indian Oil, which is India's largest oil refiner, has seen a sharp improvement in refining margins recently due to inventory gains. "We have seen a phenomenal improvement in demand. So, if the trend continues, we should expect recovery in auto fuel demand in a quarter," he said.
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