New Delhi: Despite remaining among the top refining hubs in the world, India’s refining capacity growth during the past five years has not kept pace with expectations, the government told the Rajya Sabha on Monday. In a written reply to an unstarred question by Trinamool Congress MP Ritabrata Banerjee, Minister of State for Petroleum and Natural Gas Suresh Gopi said India’s total refining capacity stood at 258.1 million metric tonnes per annum (MMTPA) as on April 1 this year.
While India is the fourth-largest refiner and the third-biggest consumer of crude oil globally, the expansion in refining capacity has been modest since 2020. In the last five years, capacity has increased from 248.4 MMTPA to 258.1 MMTPA, which is an addition of less than 10 MMTPA. That rapid scale-up has fallen behind schedule, though the government says India remains self-sufficient in refining and continues to be one of the largest global refining centres at a time when several of the smaller refineries around the world are shutting down.
The Centre has forecast that refining capacity in the country will reach 309.5 MMTPA by 2030, led by major expansion and greenfield projects. Various major refinery projects scheduled for completion have missed initial timelines. Projects include the HPCL Rajasthan Refinery Limited (HRRL) along with expansion works at the Panipat, Numaligarh and Barauni refineries, each delayed for a variety of reasons. These include time-consuming statutory clearances, delays in land acquisition, technical feasibility tests and problems related to contracting. Describing refineries as highly capital-intensive and technologically complex installations with long gestation periods, the government said it is closely and regularly monitoring the progress of all delayed projects, which are now scheduled for completion under revised timelines.
The government maintained that the refining sector of India is well-positioned to meet the country’s future fuel demand on emerging issues of import dependence and energy security due to slower capacity growth. It cited evolving consumption patterns and the impact of the energy transition as key factors shaping future requirements.
The greater use of compressed natural gas, biofuels including ethanol, electric vehicles, and shifting consumer preference would slow down growth in conventional fuel demand and ensure that the current and planned refining capacity is adequate.
The government also said that the country’s energy security and the petrochemical sector are unlikely to be adversely impacted because of the current rate of capacity addition, as India continues to emerge as a major refining and export hub even as it pursues its goals of shifting to cleaner forms
of energy.