India’s petroleum product exports are likely to grow by about 25% from FY2015 levels of $44.4 billion. India is one of the world’s leading exporters of refined petroleum products. Growth is expected over the next few years as new refining capacity comes on stream by December 2026 through Indian Oil Corporation’s (IOCL) largest-ever expansion programme.Although India imports about 90% of its crude oil requirement, it has become one of the world’s largest exporters of refined petroleum products, using its large and sophisticated refineries to process imported crude oil for both the domestic market and international buyers. The latest capacity expansion also comes at a time when global refining capacity additions are limited, while supply disruptions in Russia and the Middle East continue to support refining margins.Read this also Trump’s ‘ceasefire’ remarks and fresh disruption in the Strait of Hormuz: What it means for India
IOC’s refining capacity boosted
The capacity addition by state-owned refiner IOCL will increase its total refining capacity to a record 98.05 MMTPA from the current 80.75 million metric tonnes per annum (MMTPA).“Whatever surplus capacity we have after meeting domestic needs, we will focus on exporting. This has the potential to increase our export share to about 15% of total revenues, from 5% currently,” a senior IOCL official told ET. “We do not work with a fixed export target, and our priority remains domestic,” a senior IOCL official told ET.The company has already spent over Rs 53,500 crore as part of its Rs 75,000 crore expansion programme. The project extends to IOCL’s refineries at Panipat, Vadodara and Barauni. The refining capacity in Panipat is being increased from 15 MMTPA to 25 MMTPA, while the capacity of Vadodara is being increased from 13.7 MMTPA to 18 MMTPA. Capacity at Barauni will increase from 6 MMTPA to 9 MMTPA. All three expansion projects are scheduled to be commissioned during November-December 2026.At present, the installed capacity of India’s refining industry is about 258.1 million metric tonnes per annum (MMTPA), while the domestic petroleum product consumption is about 239 MMTPA.Read this also India’s economy passes Iran war test. Could El Nino spoil the party?However, in practice, refineries typically operate at 105–115% of their installed capacity, resulting in actual annual production of around 300 million tonnes. Of this, about 61.5 million tonnes represents surplus production which is shipped to foreign markets.Reliance Industries handles about 70% of the country’s refined fuel exports through its 70 MMTPA Jamnagar refinery, the world’s largest refining complex at a single location. By the end of 2026, IOCL is expected to add a refining capacity of 17.3 MMTPA. After meeting domestic requirements, a large part of the surplus production is likely to be available for export. Should the incremental production be sold abroad, it could provide a significant boost to India’s petroleum product exports, thereby enhancing foreign exchange earnings as well as strengthening the country’s position as a global refining hub.However, the senior official said, “If demand in India increases significantly, we may not have a large exportable surplus on a sustained basis from our refining system.”Read this also Strait of Hormuz Toll Proposal: What are the major waterways in the world and are there any fees to cross them?