India could increase refining capacity by 800,000 Bpd by 2030

Indian refiners are expected to increase their total refining capacity by as much as 800,000 barrels per day (bpd) by the end of fiscal 2030 to meet rising domestic fuel demand, Crisil Ratings said on Friday.

In the decade to fiscal 2024, India’s refining capacity rose by 42 million tonnes to 257 million tonnes, or 5.16 million bpd. Refiners increased capacity to cope with growing domestic consumption as exports remained limited at 1.3 million bpd in the period, the rating agency said in a report.

By the end of fiscal 2030, India is set to add up to 40 million tonnes, or more than 800,000 bpd, to its refining capacity and increase its installed base capacity to 295 million tonnes, or 5.92 million bpd, according to Crisil Ratings.

The capacity addition would be required to address the expected increase in consumption as current capacities are already optimally utilised, Crisil Ratings noted.

“Most of the additional capacity would be brownfield expansion to meet demand for end products, thereby de-risking the project,” said Joanne Gonsalves, associate director, CRISIL Ratings.

“Furthermore, the sector benefits from its strategic importance to the government.”

Over the past decade, India’s domestic consumption of petroleum products has grown by 4% per year, with transportation fuels, accounting for about 56% of consumption, growing by 4% each year, according to Crisil.

“We expect overall consumption of petroleum products to moderate slightly and register a CAGR of ~3% over the next six years, mainly due to slower growth of 2-3% in transportation fuel consumption,” Anuj said Sethi, Senior Director, CRISIL Ratings.

India will drive up to 35 percent of global energy demand growth over the next 20 years, Oil Minister Hardeep Puri told the Gastech conference in Houston last week.

“If you say global demand increases by one percent, ours increases by three times,” Puri said. “Over the next two decades, 35% of global demand growth will come from India.”

By Charles Kennedy for Oilprice.com

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