Oil PSUs utilise 81% of FY26 capex by Jan as expansion drive accelerates

India's state-run oil companies have spent Rs 1.07 lakh crore - 81% of their FY26 capex target - by January, driven by aggressive investments in exploration, production and refinery expansion

India’s oil public sector undertakings (PSUs) had utilised 81 per cent of their targeted capital expenditure for the current financial year by January-end, according to fresh data from the oil ministry, as the firms work aggressively on boosting domestic production and refining capacities.

 

The state-run oil firms had spent Rs 1.07 lakh crore in the first 10 months of fiscal 2025–26 (FY26) from the annual targeted capex of Rs 1.32 lakh crore, according to data from the Petroleum Planning and Analysis Cell (PPAC). At the current pace, the oil companies are likely to surpass their targeted capital expenditure in FY26, given they fully utilise their allocated capex. 

 

Several companies — Oil India (OIL), Hindustan Petroleum Corporation (HPCL), Mangalore Refinery & Petrochem (MRPL), Chennai Petroleum Corporation (CPCL) and Engineers India (EIL) — have already exceeded their annual targets during the April–January period. 

Among the oil majors, Indian Oil (IOCL) and Oil and Natural Gas Corporation (ONGC) have earmarked the highest capex at Rs 35,294 crore and Rs 34,900 crore, respectively, for the year, followed by Bharat Petroleum Corporation Ltd (BPCL) at Rs 18,500 crore.

 

Amid stagnant domestic production, India’s upstream companies, including ONGC and Oil India, have intensified efforts to boost production from their mature oilfields while ramping up exploration in offshore areas. Carrying out exploration activities in deep-water and ultra-deep-water blocks is a highly capital-intensive exercise.

 

Meanwhile, state-run refiners such as IOCL, BPCL and HPCL have been expanding refining capacity at their existing refinery-cum-petrochemical plants while also setting up greenfield refineries to meet rising energy demand.

 

HPCL has established a nine million tonnes per annum (MTPA) refinery in Rajasthan’s Barmer, which is likely to be commissioned in the current fiscal, while BPCL is working on a refinery project in Andhra Pradesh. In addition, Indian Oil’s subsidiary CPCL is setting up a refinery and petrochemical plant in Tamil Nadu.

 

The capacity expansion drive comes as India, the world’s fourth-largest refining hub, aims to position itself as a key global centre for petroleum refining.

 

India’s oil majors’ capital expenditure has been on the rise in recent years as the firms spent Rs 1.62 lakh crore in FY25, compared to Rs 1.28 lakh crore in FY24 and Rs 1.14 lakh crore in FY23.