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In the next few years, India’s export of petroleum products, which was $44.4 billion in the financial year, may increase by one-fourth. The main reason for this is that by December 2026, new refining capacity will start under the biggest ever expansion program of Indian Oil Corporation (IOCL). With the increase in capacity of the state oil company, its refining capacity is expected to increase from the current 80.75 million metric tons per year to a record 98.05 million metric tons per year.
A senior IOCL official said in the ET report that whatever additional capacity we have after meeting the domestic requirements, we will consider exporting it. This has the potential to increase our export share from the current 5 percent to about 15 percent of the total revenue. However, we do not work with any fixed export target, and our priority always remains the domestic market.
This is the complete planning
More than ₹ 53,500 crore has been spent so far in this Rs 75,000 crore project. Panipat, Vadodara and Barauni refineries are included in this project. Their capacity is being increased respectively from 15 million metric tons per year to 25 million metric tons per year, from 13.7 million metric tons per year to 18 million metric tons per year and from 6 million metric tons per year to 9 million metric tons per year. These three projects are planned to be operational by November-December 2026.
The current installed capacity of India’s refining sector is about 258.1 million metric tonnes per annum, while domestic consumption of petroleum products is about 239 million metric tonnes per annum. However, refineries typically operate at 105-115 percent of their capacity, bringing real production to around 300 million tonnes annually. Additional production of about 61.5 million tonnes is exported. Because of this, India has become one of the world’s largest suppliers of refined fuel.
Reliance Industries exports the most
About 70 per cent of India’s refined fuel exports come from Reliance Industries, which runs the world’s largest single-location refinery at Jamnagar with a capacity of 70 million metric tonnes per annum. With IOCL adding another 17.3 million metric tonnes per annum of refining capacity by the end of 2026, a large portion of the additional production is expected to be available for overseas markets after domestic demand is met. If this additional production is exported, it can significantly increase India’s exports of petroleum products, which will strengthen the country’s position as a global refining hub and will also increase foreign exchange earnings.
India one of the world’s largest suppliers
A senior official was quoted as saying in the ET report that if the demand in India increases significantly, then we may not have much surplus left from the refining system for continuous export. Despite importing more than 90 percent of its crude oil requirements, India has emerged as one of the world’s largest exporters of refined petroleum products. It uses its large and complex refineries to process imported crude oil for both domestic consumption and foreign markets. The expansion comes at a time when global refining capacity additions are limited and refining margins are being supported by disruptions in Russia and the Middle East.
