MUMBAI: India's state-owned refiners are still betting on expansion of refining capacity, though the focus now is also on upgrading refineries to include petrochemicals along with refining. The increased focus on electric vehicles and the announcement by the owner of the largest refining complex on their ability to shift from oil to chemicals have not shifted their focus from transport fuels.
“Endgame for the oil industry? We do not believe that,” said M K Surana, chairman, Hindustan Petroleum Corporation. He said demand for diesel might not go away, and it would be incremental demand that may move away from fossil fuels by 2030. India has a total refining capacity of around 250 Million Metric Tonne Per Annum (MMTPA) and last financial year the consumption of refined fuel was at 212 MMT. But state-owned refiners with an overwhelming share in retailing are short of fuel and buy from private refiners to meet the shortfall.
“We have been consistently selling more than what we refine,” said Sanjiv Singh, chairman, Indian Oil Corporation, which would have the lead share among the three PSU refiners who are part of the mega west coast refinery joint venture. Singh is confident that the 60 MMTPA Ratnagiri Refinery project, a joint venture with Saudi Aramco and UAE’s Adnoc, would go ahead though faced with a land acquisition issue. A new site has been notified by the Maharashtra government, and within this year it would be ready with the detailed project report. Experts say the project needs to stick to a clear deadline of 2025, without which it might not be a feasible project.
This assertion comes at a time when Reliance Industries which has a 68 MMTPA refining complex at Jamnagar in Gujarat, has indicated moving away from oil as the world moves towards renewables.
With Maharashtra going to polls in the next couple of months, the issue of land acquisition and completion may have to wait till the new government is formed and the cost and configuration by then should show where the opportunities for Raigad refinery stand.
Experts stress keeping to 2025 deadline
Experts say the west coast refinery project needs to stick to a clear deadline of 2025, without which it might not be a feasible project at a time when the world is moving towards renewables. Reliance Industries has already indicated moving away from oil.