Indian Oil Corporation Ltd (IOCL) will make an investment of Rs 1.5 lakh crore, including Rs 50,000 crore for expanding its existing brownfield refineries, in the next five to seven years, a top company official said on Friday. The company has planned <g data-gr-id="49">expansion</g> of 10 refineries, infrastructure and other facilities, considering the future demand for energy, IOCL Chairman B Ashok told while <g data-gr-id="48">adressing</g> a press conference here.
The capacity of its existing Gujarat refinery will be increased to 18 million tonnes (mt) from the present 13.7 mt, Mathura to eight million tonnes in two phases, Panipat to 20 mt from the present 15 million tonnes and Barauni to nine million tonnes in two phases from the present six million tonnes, Ashok said.
Besides, the new refinery in Paradip, with a capacity of 11 million tonnes, will commence operation by November, which would lead to IndianOil refineries holding over 35 per cent share of the national refining capacity and more than 50 per cent market share in petroleum products retail.
Ashok was here to declare the IndianOil petrol pumps in Coimbatore and Tirupur as fully automated ones and said, of the nearly 25,000 outlets under Indian Oil, 7,700 have been automated. Though India has now excess refining capacity, the demand for energy is expected to go up rapidly, Ashok said.
Against the demand of around 165 million tonnes per year, the total refining capacity in India is pegged at 215 million tonnes. “The company is looking at the future, as the demand for energy would be high in a <g data-gr-id="40">fast growing</g> economy,” he pointed out.
To a question on the impact of fall in crude oil prices on the company, Ashok said it has a positive effect, with company’s borrowings, which stood at around Rs 80,000 crore in 2013-14, falling to less than Rs 50,000 crore currently.
“Our interest outgo has also come down in 2014-15. We made savings of Rs 1,600 crore on interest alone in 2014-15. We expect the outgo to be limited this year,” he said. He said that all IOCL fuel stations in Chennai would be fully automated by November and Tiruchirapalli by December, followed by Madurai and Salem in a phased manner.
To a question on the ‘Give it Up’ campaign initiated by Prime Minister, the official said more than 30 lakh consumers have voluntarily given up their subsidies. Ashok also said that there are several fixed elements such as transportation and refining costs which restrict oil marketing companies (OMCs) passing on the entire benefit arising out of fall in global oil prices.
“Crude rate is one part of the fluctuating prices of petrol in International market. There are other fixed elements, like transportation and the process of reform and refine, rates of which are not coming down, adding to end product prices,” the IOCL chairman explained.
He was replying to a specific question on the general <g data-gr-id="54">complaints over</g> the disparity between petroleum products prices and International crude prices. Stating that the crude oil a barrel in June 2014 was sold at $114 whereas it was now $50, he said that considering the decrease, the oil companies have passed on the benefit to the consumers as much as possible.
Besides, the companies have to calculate the exchange rate dollar versus Rupee, which was now over Rs.60, as against about Rs.45, while fixing the prices, Ashok said. Asked whether the preference of automobile firms for more diesel cars will have an effect on petrol, Ashok said, “The growth of petrol sales is robust and is in double digit and the balance is still tilting towards petrol.”