IOC to review greenfield expansion projects in refining segment: Chairman

Vaidya also added as part of the company's long-term strategy, it was looking to enhance petrochemicals integration to about 14 to 15 per cent of Petrochemical Intensity Index (PII) by the year 2030

State-run Indian Oil Corporation (IOC) on Monday said it will review all its greenfield expansion projects in the refining segment, with the Covid-19 pandemic impacting fuel demand. The refiner said it plans to boost its petrochemical intensity to help protect against volatility.

IOC’s board on Monday also approved an integration plan for its petrochemical and lube facilities at its Gujarat refinery at an estimated cost of Rs 17,825 crore.

IOC Chairman S M Vaidya said, “We are also reworking the demand supply dynamics and will review all our greenfield expansion projects.” The company, however, does not plan to revise its planned capital expenditure (capex) for the current financial year. Vaidya said the firm is on track to achieve the capex of over Rs 26,000 crore.

On the pandemic’s impact on fuel demand, Vaidya said, “Demand has not been destructed, but disrupted.”

IOC said in the first fortnight of September, its diesel sales rose 22 per cent month-on-month, but were down 9 per cent year-on-year (YoY), whereas petrol sales were up 9 per cent month-on-month and clocked YoY growth of 1 per cent. “The robust month-on-month recovery is primarily due to easing of lockdown restrictions, while petrol demand is moving upwards due to increasing preference for personal mobility,” said Vaidya.

The top executive expects demand for auto fuels to return to pre-Covid levels in three months. “I have no real answer for aviation turbine fuel.”

On gross refining margins (GRMs), Vaidya said GRMs recovered to $10.9 per barrel in August due to inventory gains.

Vaidya said as part of the company’s long-term strategy, it looks to enhance petrochemicals integration to about 14 to 15 per cent of the Petrochemical Intensity Index (PII) by 2030. “The integration of polypropylene (500 KTPA) and lube oil base stock (235 KTPA) units (at Gujarat refinery) will enhance the petrochemical and specialty products integration index of the Gujarat refinery to 20.7 per cent on incremental throughput.”

In the long run, the firm intends to develop fuel cells and indigenous hydrogen storage solutions to promote green mobility, Vaidya said at the AGM. “Our retail outlets of the future will be ‘energy pumps’ that offer a wide assortment of cleaner, greener and more efficient fuel options to millions of our customers,” he said.