MUMBAI, Sept. 12 -- India's state-run refiner Indian Oil Corp. (IOC) expects to import 14% more oil during the current fiscal year than it did during 2005-06 in order to feed an expanded plant at Haryana. The company is building new plants and expanding existing operations to meet India's surging demand for fuels and chemicals.
IOC has doubled the capacity of its 120,000 b/d Panipat refinery, increasing its output to 12 million tonnes/year, equivalent to about 240,000 b/d.
"More crude will be required to keep it going," said S Narasimhan, IOC's finance director. "The import bill will be substantially higher than last year because crude prices have gone up so much."
Demand for gasoline and diesel is expected to rise further as India's Congress-led coalition government seeks to boost the economy's gross domestic product to more than 10% in the next decade, from an average 8% over the past 3 years.
Energy experts forecast that IOC and other state-owned refiners, including Hindustan Petroleum Corp. and Bharat Petroleum Corp., will import 110 million tonnes of oil during fiscal 2006-07, a 10% jump from fiscal 2005-06.
IOC's purchases from Saudi Arabia and other suppliers were slated to rise to 40 million tonnes/year Apr. 1, compared with 35 million tonnes/year imported a year earlier. This will increase the refiner's import bill by 25% to $20 billion this year.
Higher imports by India and China have kept oil prices near record levels as demand growth in the world's two most populous nations outpaced output. This year, India's demand is forecast to increase by 5%, while China will require 7.2% more oil than last year.
The seven IOC-operated refineries can now process an aggregate 47.3 million tonnes/year of oil, and IOC units, Bongaigaon Refinery & Petrochemicals Ltd. (27,110 b/d) and Chennai Petroleum Co. (130,000 b/d), have the capacity to process 12.85 million tonnes/year.