India to Boost Refining Capacity to Meet Growing Fuel Demand

India’s refining sector is poised for significant expansion to cater to the country’s burgeoning fuel consumption. According to the junior petroleum minister, the nation’s annual refining capacity is projected to surge by approximately 20% to 309.5 million metric tons, or 6.19 million barrels per day, by the year 2028.

To achieve this ambitious target, Indian refiners are actively modernising their facilities and increasing production capabilities. Currently, the country’s refining capacity stands at around 5.14 million barrels per day.

In parallel efforts to bolster energy security, India is also expanding its strategic petroleum reserves (SPRs). These reserves, currently located in three southern Indian sites, can currently meet the nation’s crude oil needs for 9.5 days. To enhance energy resilience, the government has greenlit the construction of additional SPR facilities in Odisha and Karnataka, with a combined capacity of 6.5 million tons. Private sector participation is encouraged in these new storage projects.

These strategic investments in refining capacity and SPRs underscore India’s commitment to ensuring energy self-sufficiency and mitigating supply chain risks in the face of growing domestic fuel demand.

To lower the amount of crude oil imported, the government has taken a number of actions. These include, among other things, increasing the use of natural gas as fuel and feedstock nationwide in order to increase the country’s natural gas share of the economy and transition to a gas-based economy, promoting the use of renewable and alternative fuels such as ethanol, second-generation ethanol, compressed biogas, and biodiesel, improving refinery processes, encouraging energy conservation and efficiency, and working to increase the production of oil and natural gas through various policy initiatives.

The Government of India is constructing 2G ethanol facilities throughout the nation through Oil Marketing Companies (OMCs) in order to significantly advance the Ethanol Blending Program.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.