Mukesh Ambani promoted Reliance Industries Ltd (RIL) is looking to expand its refining capacity at Jamnagar in Gujarat. The company ranks second in domestic refining sector after IndianOil that has a capacity of 65.7 million tonnes.
"Our chairman (Mukesh Ambani) has said Reliance will be doubling profit. Downstream (oil refining and marketing) are very much part of this plan" Tony Fountain, chief executive officer of refining and marketing at RIL told reporters at the ongoing Petrotech 2012.
RIL owns and operates a 33 million tonne domestic tariff area or DTA refinery that sells bulk of its produce at domestic market. It also operates a 29 million tonnes refinery in a special economic zone in Gujarat dedicated to exports.
"We are very much looking at all sorts of plans", he said. "We are looking at options at both DTA and SEZ refineries". However, he did not share details of the refining capex.
At its annual general meeting (AGM) in June this year, Ambani said the company aims to invest Rs 100,000 crore in its petrochemical, oil and gas business along with new sectors of telecom and retail business to double profit. However, he did not speak on refinery expansion.
RIL is setting up a $4 billion petroleum coke gasification project that will replace expensive LNG as fuel at its refineries. "We are adding significant project of petroleum coke gasification", Fountain said.
The country’s oil refining capacity is expected to rise 24% to about 267 million tonnes by 2015-16 as both public and private sector refiners have lined up expansions. The country presently has 25 oil refineries with a crude oil processing capacity of 215.066 million tonnes. This will rise to 264.966 million tonnes by 2015-16, Minister of State for Petroleum and Natural Gas R P N Singh had said in a written reply to a question in the Lok Sabha in August this year.
Need level-playing field in retail business
Batting for a level-playing field in retail fuel business, Fountain said the government should either free diesel pricing from its control or provide subsidy equivalent to private firms too.
He said the company continues to keep most of its 1,452 petrol pumps closed in absence of a level playing field with its main public sector competition.
While the government has freed petrol pricing, diesel continues to be sold at highly subsidized rates. “We are not selling diesel anywhere… only a few outlets are operating (for petrol sales),”he said. “We were 13% of the market (before outlets were shutdown as it could not complete with public sector).”
“We are ready to reopen (petrol pumps) if the fiscal environment is right,” he said.
