India mulls doubling oil refining capacity to 450-500 mt by 2030: Pradhan

As the world's third-biggest oil consumer, India imports 85% of its energy requirements and is planning ahead to cater to the rise in demand.

India plans to almost double its oil refining capacity to 450-500 million tonnes in the next 10 years to meet the rising domestic fuel demand as well as cater to export market, Oil Minister Dharmendra Pradhan said on Tuesday.

Speaking at a webinar on 'Atmanirbhar Bharat: Fostering Domestic Steel Usage in Oil & Gas Sector', he said construction of a new 60 million tonnes a year west coast refinery, which is crucial to the capacity doubling plan, will start soon.

"Our refining capacity will increase from about 250 million tonnes per annum now to 450-500 million tonnes in next 10 years," he said.

The capacity addition will be both brownfield (expansion of existing units) and greenfield (new refineries), he said.

The refining capacity of 249.9 million tonnes exceeded the fuel demand of 213.7 million tonnes in 2019-20, but the demand is likely to rise to 335 million tonnes by 2030 and 472 million tonnes by 2040.

International Energy Agency (IEA) forecast that India's fuel demand will reach 458 million tonnes by 2040.

As the world's third-biggest oil consumer, India imports 85 per cent of its energy requirements and is planning ahead to cater to the rise in demand.

Pradhan said while a new grassroot refinery of 9 million tonnes capacity is under construction at Barmer in Rajasthan, existing units at Koyali in Gujarat, Panipat in Haryana, Paradip in Odisha, Vizag in Andhra Pradesh, Mumbai, Bina in Madhya Pradesh, Numaligarh in Assam and Chennai are being expanded.

"Construction on the west coast refinery will start soon," he said, adding the refinery construction as well as laying of oil and gas pipelines and expansion of city gas distribution network will fuel demand for steel.

Speaking at the webinar, Indian Oil Corp (IOC) Chairman Sanjiv Singh quoted a recent report of the Working Group on Enhancing Refining Capacity to say India's refining capacity will expand to 363 million tonnes by 2030, to 443 million tonnes by 2035 and 533 million tonnes by 2040.

Also, India's India's LNG import capacity will rise by 40 million tonnes by 2030, adding to present capacity of 42.5 million tonnes.

While fuel demand has fallen in recent times due to slowdown in the economy and the lockdown imposed to curb spread of coronavirus, "in two years time, we should be back to projected demand trajectory," he said.

Detailing expansion planned in oil and gas sector, Singh said 78,000 petrol pumps are planned to be added to 69,109 present ones. Also, 2,207 CNG stations are to be expanded to 10,000.

Oil pipeline network of 28,790 km is to be augmented by another 15,000-km and 14,239 km will be added to 16,981 km of natural gas lines.

India has leapfrogged from a modest 62 million tonnes per annum refining capacity in 1998 to 232 million tonnes at end of March 31, 2016 and further to 249.9 million tonnes by March 2020.

The growth in refining capacity, which has made India a leading exporter of petroleum products since 2001-02, has been possible because of the de-licensing of petroleum refining by the government.