Govt panel to enhance refining capacity by 2040

15 Jun 2016 | By Ramya

The Centre has constituted an expert group to devise a plan and raise India's refining capacity by 2040.

The decision comes as India's oil demand has been projected to more than double in the next 25 years.

A 12-member Working Group, comprising Directors of BPCL, IOC, and HPCL, would prepare the Approach Paper and would be led by the Oil Ministry's Additional Secretary.

In context: Boosting India's oil refineries

Introduction What is refining capacity?

The total input capacity that a set of refineries or an individual refinery is built to handle before converting them into other consumable products is called refining capacity.

India's refining capacity in 1998 was 62 MT per year; by the end of Mar'16, it surpassed 1998's number to reach 232 MT.

This growth turned India into a leading petroleum product exporter since 2001-02.

15 Jun 2016Govt panel to enhance refining capacity by 2040

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Approach Paper for expansion was needed

The Oil Ministry stated, "It was felt that an approach paper for refinery capacity expansion of PSU refineries by the year 2040 needs to be prepared for meeting the growing demand of petroleum products in the country."
Working Group would include private sector representatives

Private FirmsWorking Group would include private sector representatives

According to the Oil Ministry, the Working Group would include representatives from private sector firms like Reliance Industries and Essar Oil, apart from the directors of refineries at IOC, BPCL, and HPCL.

Managing directors of Mangalore Refineries, Numaligarh Refineries, and Chennai Petroleum Corporation would also constitute the group.

India's current refining capacity of 232.066 MT exceeded the demand of 183.5 MT in 2015-16 fiscal.

Working GroupWorking Group would have a three-month tenure

Within three months, the Working Group would assess primary energy requirement for 2040 and the technological developments in various energy fields.

The Group would also develop India's energy mix with a breakup concerning oil, gas, nuclear, coal, solar, hydro, and biofuel.

It would also assess primary petroleum products' demand, link the advancements in other energy forms, and enhance energy efficiency and government policies.

Oil Ministry's order

The Oil Ministry’s order said, “New capacities in petroleum refining will depend upon aggregation of demand from different petroleum derived products, which itself depends upon substitution by other forms of energy and government policies.”
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Govt's PlansExpansions would raise capacity by 2018

The current expansions underway are expected to raise the refining capacity to at least 260 MT by 2018.

The Oil Ministry said that the rise in projected demand "paves the way for gradual shift" towards cleaner and renewable fuels that are rich in hydrogen or towards neat hydrogen.

The Ministry envisions that 2040's energy mix could be entirely different from that of today.