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Refining: Attaining self sufficiency

Feb 16, 2001

The Indian refining sector has almost doubled its capacity over a year from 69.1 MMTPA in FY99 to 112 MMTPA in FY00. The country's drive to achieve self sufficiency in petroleum products has been achieved with India turning an exporter of refined products. The major contributor to the rise in capacity was Reliance Petroleum that commissioned a 27 MMTPA refinery in the current fiscal. Others to chip include Hindustan Petroleum (1.5 MMTPA), Numaligarh Refinery (3 MMTPA), Mangalore Refineries & Petrochemicals (6 MMTPA) and Indian Oil (1.5 MMTPA). Despite, North being a high demand growth area no new capacity has been added in the region.

(MMTPA) IOC* HPCL BPCL* RPL MRPL Total
North 13.5 - - - - 13.5
South 7.0 - 7.5 - 9.7 24.2
East 11.9 7.5 3.0 - - 22.4
West 12.5 6.0 7.0 27.0 - 52.5
Total 44.9 13.5 17.5 27.0 9.7 112.6
* IOC capacity is inclusive of CPCL and BRPL
* BPCL capacity is inclusive of KRL and NRL

For the current fiscal the Oil Coordination Committee (OCC) had anticipated petroleum consumption to grow by 6.9% to 104.9 MMT. However, with oil prices skyrocketing to touch new 10-year highs ($35/barrel), consumption is expected come in at 98.6 MMT a marginal decline of 0.8% YoY. However, other monitoring agencies put the consumption figure at 102 MMT for the current fiscal, which is a marginal increase of 2.6%. In either case, the current year represents a sharp decline in consumption growth as compared to the average growth in the previous five years. The petroleum industry had grown in excess of 7% p.a from FY96 to FY00.

Company New Capacity City/Town Region
Hindustan Petroleum 9 Bhatinda North
Bharat Petroleum 6 Bina Central
Indian Oil 9 Pradip East
Essar Oil 10.5 Jamnagar West
Nagarjuna Oil 6 Cuddalore South
Total 40.5
Capacity in MMTPA

The northern and western parts of the country are considered to be the high demand growth areas for petroleum consumption. Although significant capacities have come up in the Wester region the Northern region continues to be deficient in petroleum products. HPCL is expected to set up a 9 MMTPA plant at Bhatinda to overcome the existing shortfall. New capacities planned by the oil majors and expected to come up in the next four years seem to be distributed more equally. The refining capacity could increase to an estimated 155 MMTPA by FY05 should all these projects materialise in time.

Petroleum products demand is pegged at 104 MMTPA for FY02 with a crude throughput at 120 MMTPA. Consequently, the country will continue to witness a surplus in petroleum products and will have to focus on the export markets.

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