India is the only target of the world's most recent round of oil refining wagers

India is the only target of the world's most recent round of oil refining wagers

India is the only target of the world's most recent round of oil refining wagers

In order to boost production of conventional transportation fuels like gasoline and diesel, the South Asian country has started building at its oil refineries, with plans to raise capacity by more than 20% over the next five years. Rystad Energy projects that these extra expenses will come to around $60 billion.

The world is about to see the greatest refining boom in history, as India seeks to expand its capacity to meet the nation's increasing need for fossil fuels.

In order to boost production of conventional transportation fuels like gasoline and diesel, the South Asian country has started building at its oil refineries, with plans to raise capacity by more than 20% over the next five years. Rystad Energy projects that these extra expenses will come to around $60 billion.

It is a unique boost for the global refining business, which is in decline in the US and Europe. Meanwhile, China's massive sector, which has developed over years to become a processing powerhouse, is responding to Beijing's green ambitions. On the other hand, India's expanding transportation needs and sluggish adoption of electric cars will prolong the country's love for gasoline and diesel.

"There is no expansion in the West," said Giovanni Serio, Vitol Group's director of research. "We see the trend extending to grow by over twenty thousand barrels per day between present day and the next four or five years" in India, "The Development continues in areas where demand is growing."

Junior Oil Minister Rameshwar Teli said last month that India's refining capacity is expected to increase by 56 million tonnes by 2028, without providing any details. This corresponds to a 22% increase in overall capacity, or 1.12 million barrels per day.

How the administration intends to get to such greater levels is not specified. Based to estimates by Bloomberg, the state-run refiner has announced an increase of around 50 million tonnes, which might work within Tele's timeframe. Commissioning dates for projects with a capacity of around 37 million tonnes range from 2024 to 2026; however, the completion date for the remaining capacity—which consists of both planned expansions that are now under implementation and concept stage—is uncertain.

The biggest is the Panipat facility of Indian Oil Corporation, which is adding 10 million tonnes and is expected to start operations in late 2019 in the state of Haryana. With 9 million tonnes, the new Barmer refinery of Hindustan Petroleum Corporation is the second biggest refinery in the state of Rajasthan, which is located in the northwest. The plant should be fully operational by 2025, with development anticipated to be finished in 2024.

The refineries at Visakhapatnam, Gujarat, and the Barauni facility in Begusarai, Bihar state, are all undergoing minor expansions.

Nevertheless, 56 million tons is not an insane figure, according to Vitol's Serio. Having said that, I believe that, from our vantage point, we are now only seeing half of these initiatives' potential.

Most of the burden will probably fall on state-run refineries. To capitalize on the shift to renewable energy, Reliance Industries Ltd., the biggest private oil processor and owner of the massive Jamnagar complex, is attempting to switch out gasoline and diesel for cleaner fuels.

According to Sushant Gupta, an oil expert at Wood Mackenzie, "India is currently behind in adding new refinery capacity, anything that needs to improve if it is to be more self-reliant." By 2030, the analyst projects a daily rise in demand of 1.3 million barrels in the nation.

In addition to satisfying its own needs, the Asian country is crucial in supplying fuel—particularly diesel—to other continents like Europe, where supplies were interrupted by Russia's invasion of Ukraine.

boost the capacity

According to IAEA estimates, India will boost its capacity by one million barrels per day over the course of six years, reaching 6.2 million barrels per day of processing, or a 19% increase in overall refining. This will happen by 2028. Although daily volumes are increasing in China, total capacity growth is just 8%. The Middle East makes up around 9%.

India's refining sector is still far smaller than that of most other nations, notably the US and Europe, which have been reducing capacity, despite the significant percentage rise. The area of China is more than three times greater.

Petrochemical facilities are among the projected expansions from India; nevertheless, the majority of the capacity will be used for transportation fuels. As of April 1, 2023, the nation has a total refining capacity of around 254 million tonnes, according to official statistics.

India's economy is still in its early stages of development, so it makes sense for the nation to continue investing substantially in conventional fuel while also laying the foundation for the switch to green energy, according to Dylan Sim, an oil analyst with FGE.

Although India still mostly depends on coal for electricity production, it intends to increase its capacity for liquefied natural gas and has set a net-zero objective by 2070. The nation aspires to be a part of the energy transition.