You are here: Home » Economy & Policy » News
Business Standard

Indian refiners bet on petrochems to cater rising demand, avoid low margins

At present Indian refiners are geared up to maximise output of diesel, which makes up about two-fifths of refined fuel demand in Asia's third-largest economy

Topics
Indian oil refiners | Petrochemicals | Fuel demand

Reuters  |  NEW DELHI 

Petrochemicals plant
IOC recently approved projects worth $4.6 billion to enhance the capabilities in petrochemicals and speciality products of its refineries

Indian refiners have turned their focus to raising production of to cater for rising demand and help hedge against lower refined fuel margins, the country's oil secretary and company officials said on Wednesday.

"We need more because that's what we are importing at the moment," Oil secretary Tarun Kapoor said at the India Energy Forum organised by IHS CERAWeek.

"Diesel demand is not likely to increase at the same pace as the requirement for petrochemicals," Kapoor said. "We may also have to reconfigure the existing refineries so that we are able to match the requirement of the country (for petrochemicals)."

At present Indian refiners are geared up to maximise output of diesel, which makes up about two-fifths of refined in Asia's third-largest economy.

The country's top refiner Indian Oil Corp aims to raise the proportion of from each barrel of oil it processes to 20%, from the current level of between 8% and 10%, its chairman S.M. Vaidya said at the event.

"As a long-term strategy and due to the uncertainty in the margins of the refined fuel we also intend to enhance our petrochemical integration strategy to around 14% to 15% on a corporate basis by the year 2030," Vaidya said.

IOC recently approved projects worth $4.6 billion to enhance the capabilities in petrochemicals and speciality products of its refineries, Vaidya added.

India's per-capita consumption of petrochemicals is about a tenth of the global average, providing scope for growth.

Nayara Energy, part-owned by Russian oil major Rosneft, sees a substantial integration between refinery and petrochemical operations, said Chief Executive B. Anand. He said petrochemicals were not just margin boosters but also provided a "margin buffer".

 

Dear Reader,


Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

First Published: Wed, October 28 2020. 23:17 IST
RECOMMENDED FOR YOU
.