India’s top oil firm IOC is looking to defer some of its refinery expansion projects to sync them with changes in demand patterns resulting from the pandemic and a gradual rise in the use of cleaner fuels, its chairman Shrikant Madhav Vaidya said.
In an interview with , Vaidya said oil demand in India has not been destructed but only deferred and Indian Oil Corp (IOC) was also betting big on petrochemicals to hedge fuel shocks.
Liquid fuels such as petrol and diesel will continue to play a dominant role in the country in the next two decades despite a creeping increase in the use of electric vehicles (EVs) and cleaner fuels like gas.
“You see the pie is also increasing. While we see EVs growing, the oil will remain a dominant fuel,” he said. “Even BP in its latest world energy outlook has projected India’s oil consumption to double to 10 million barrels by 2050.”
In 2018, an Oil Ministry report had projected that oil refining capacity will rise to 439 million tonnes by 2030 from the current 250 million tonnes, to meet the rising fuel demand of a fast-expanding economy.
IOC is also looking at petrochemicals to diversify from the challenging fuels business.
It will add petrochemical plants at all its future refinery expansions and boost existing output at its current facilities to raise the percentage of crude oil converted into petrochemicals to 15 per cent from the current 5-6 per cent.
“We feel the volatility of the fuel market can be easily controlled by having a good footprint in the petrochemicals sector,” Vaidya said. “Petroleum fuels will continue to be my main business as far as turnover is concerned, but profitability will come from petrochemicals.”
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