India's oil marketing companies (OMCs) will raise the nation's crude oil refining capacity by 35-40 million tonnes (MT) by fiscal 2030, as per Crisil Ratings. By 2030, the rating agency forecasts that the country's total installed crude refining capacity will reach 295 MT.
The growth in domestic oil consumption in India will drive this expansion, as the current refining capacity is already operating at 100-103 per cent utilization levels.
As per the rating agency, most of the expansion's capital expenditure will fall between Rs 1.9-2.2 lakh crore, with a focus on brownfield expansions for capacity additions. It also stated that these investments are predicted to have minimal project risk, and consistent profits from the refining industry will enhance the credit ratings of OMCs.
In the last ten years, India's capacity has grown by 42 million tons, reaching 257 million tons in the fiscal year 2024. This was mainly due to the increasing need within the country, as exports stayed constant at 60-65 million tons annually throughout this time. Over the last ten years, there was a 4 percent compound annual growth rate (CAGR) in the use of petroleum products within the country.
Anuj Sethi, Senior Director, CRISIL Ratings, said, "We expect overall petroleum product consumption to slightly moderate and register 3 percent CAGR over the next six years, primarily due to slower growth of 2-3 percent in transport fuel consumption. This will be caused by improving fuel economy, rising share of vehicle sales with alternative cleaner fuels, and 20 percent ethanol blending target proposed by the Government of India."
