IOCL to raise refining capacity by 25% by 2050: Shrikant Madhav Vaidya

IOCL to have $1 trillion turnover by 2047, supply 1/8th of India's energy needs

State-owned Indian Oil Corporation Limited (IOCL) will raise its annual refining capacity by 25 per cent to 88 million tonnes per annum (MTPA) by 2050, IOCL Chairman Shrikant Madhav Vaidya said on Friday...

The move to raise refining capacity from the current 70.25 MTPA is part of the company's aim to provide one-eighth or 12.5 per cent of India's energy needs by then, Vaidya said in an address to investors at the company's annual general meeting.

By 2050, India's oil demand is set to rise to 8.3 million barrels per day, up from 5.4 million barrels per day in 2023.

 

IOCL currently has nine refineries to convert crude oil into fuels like petrol and diesel. Refining throughput reached an all-time high of 73.3 million metric tonnes in 2023-24, with a capacity utilisation of 104 per cent.
 

The company is also planning to invest in petrochemical units that will convert crude oil into value-added chemicals directly, while also increasing its focus on gas, biofuels, and clean mobility. Case in point, the oil giant is working on a plan to set up a Rs 61,000 crore mega petrochemical complex in Paradeep, Odisha. This is the company's largest-ever investment in a single location, Vaidya stressed.

"We are also integrating petrochemicals into our refining operations. This oil-to-chemical approach will enrich our value chain, meet rising petrochemical demand, reduce import reliance, and insulate the bottom line from the impacts of oil price fluctuations," the Chairman said.

Trillion-dollar ambition

IOCL aims to become a company with a $1 trillion turnover by 2047. Its compounded annual growth rate has been 15 per cent over the past four years, the Chairman said. "In 2023-24, we not only achieved our highest-ever sales volume but also secured a substantial 20 per cent increase compared to the previous year, both domestically and in export markets," Vaidya said.

The company will continue to invest in fossil fuels and new energy avenues to have a balanced portfolio that will help achieve net-zero carbon emissions by 2046, Vaidya said.

IOCL posted a record net profit of $4.7 billion on a revenue of $104.6 billion in 2023-24. However, in the first quarter of FY25 (April-June), its consolidated net profit steeply fell 75 per cent to Rs 3,528 crore, down from the Rs 14,436 crore net profit registered in Q1 FY24.

The sharp reduction in net profit in Q1 came due to lower average gross refining margins (GRM) – the revenue refiners accrue from transforming each barrel of crude oil into refined fuel products. IOCL reported that the average GRM stood at $6.39 per barrel in Q1. This was 23.3 per cent lower than the $8.34 per barrel recovered in the same period of the previous financial year.

The company also has 20,000 kilometres of pipelines to transport oil and fuel, 99 LPG bottling plants, 129 aviation fuel stations, and over 61,000 customer touchpoints like petrol pumps and LPG agencies.