Govt forms panel to boost country's refining capacity through 2040

The idea behind the move is to align country's energy portfolio with changing trends in favour of a diversified fuel mix

The petroleum ministry has set up a working group to draw a road map for India’s crude oil refining capacity over the next two-and-a-half decades through 2040.

The idea is to align the country’s energy portfolio with a diversified fuel mix and the transition towards cleaner sources of energy.

“The energy mix in 2040 could be entirely different than what it is today. Also new capacities in petroleum refining will depend upon an aggregation of demand for different petroleum-derived products, which itself depends upon substitution by other forms of energy and government policies,” the ministry said in an order setting up the panel.

It added the working group would prepare an approach paper for capacity expansion by state-owned refiners.  The 12-member panel will be headed by an additional secretary in the oil ministry. The other members include representatives of the three state-owned refiners and Reliance Industries and Essar Oil. The working group will have a tenure of three months and its terms of reference include assessing India’s primary energy requirement through 2040; assessing likely technological developments in different energy fields; and developing a primary energy mix of oil, gas, coal, nuclear, solar, hydro, and biofuels.

The group will also assess the demand for major petroleum products in light of advancements in use, substitution by other forms of energy, and the ongoing drive for energy efficiency. It will frame the energy approach paper at a time when world energy demand is expected to double in 30 years. India’s primary energy consumption grew at a compounded annual rate of 3.46 per cent over the decade ended March 2015 to 14,090 Peta Joules from 10,024 Peta Joules in 2005-06, according to the ministry of statistics. Coal and lignite account for 75 per cent of the country’s annual production, crude petroleum provides 11 per cent, and nine per cent comes from natural gas.

India had a total crude oil refining capacity of 230 million tonnes at the end of March 2016, according to the oil ministry. Indian Oil Corporation accounted for 30 per cent, or 69 million tonnes, of the installed refinery capacity and 80 million tonnes were contributed by Reliance Industries and Essar Oil.