India\u2019s biggest oil refiner is betting on plastics as it seeks to diversify from an increasingly challenging fuels business.<\/p>\n
Indian Oil Corp. plans to add petrochemical plants to all of its future refinery expansions and boost existing output at its current facilities, Chairman Shrikant Madhav Vaidya said. Overall, less than 10% of the crude processed by the refiner is used to make petrochemicals — the building blocks for everything from food packaging to car parts — but the business contributes almost a quarter of the company\u2019s profits, he added.<\/p>\n
While there is consumer and government pressure across the world to reduce the use of plastics, processors in Asia are building or planning petrochemical plants with demand for transport fuels set to ease in the years ahead. Indian Oil this week finalized a $2.4 billion expansion at its Gujarat refinery to include a polypropylene unit, which can make products for packaging and textiles.<\/p>\n
\u201cWe realized that the volatility of the fuel market can be easily controlled by having a good footprint in the petrochemicals sector,\u201d Vaidya said in an interview. \u201cPetroleum fuels continue to be my main business as far as turnover is concerned, but profitability I intend to get from petrochemicals.\u201d<\/p>\n
Indian Oil, which operates nine refineries, saw its profit tumble more than 90% in the year ended March 31 as volatility in oil and product prices led to narrow or negative margins. Overall, the company plans to double the amount of crude processed at its refineries to make petrochemicals. At major plants Panipat, Paradip and Gujarat, the proportion of oil processed to produce petrochemicals is expected to climb to 25%, from 15-20% currently, Vaidya said.<\/p>\n
Vaidya, however, is optimistic about India\u2019s demand growth outlook for petroleum fuels and future investments in the sector. In the short term, he sees consumption reaching pre-virus levels as early as year-end, allowing the refiner to boost processing rates to 90-100%, from about 75% now. Fuel stockpiles have also eased closer to a more typical level that\u2019s sufficient enough to meet two weeks of demand, he said.<\/p>\n
Indian Oil, which controls 40% of the nation\u2019s petroleum fuels market, also plans to expand into natural gas and renewable energy. \u201cWe have every intention of becoming an energy company, not just restricted to fossil fuels,\u201d Vaidya said.<\/p>\n","protected":false},"excerpt":{"rendered":"
India\u2019s biggest oil refiner is betting on plastics as it seeks to diversify from an increasingly challenging fuels business. Indian Oil Corp. plans to add petrochemical plants to all of its future refinery expansions and boost existing output at its current facilities, Chairman Shrikant Madhav Vaidya said. Overall, less than 10% of the crude processed by the refiner is used to make petrochemicals — the building blocks for everything from food packaging to car parts — but the business contributes almost a quarter of the company\u2019s profits, he added. While there is consumer and government pressure across the world to […]<\/p>\n","protected":false},"author":39,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[133],"tags":[],"class_list":["post-375084","post","type-post","status-publish","format-standard","hentry","category-oil-gas"],"acf":[],"_links":{"self":[{"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/posts\/375084","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/users\/39"}],"replies":[{"embeddable":true,"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/comments?post=375084"}],"version-history":[{"count":0,"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/posts\/375084\/revisions"}],"wp:attachment":[{"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/media?parent=375084"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/categories?post=375084"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/tags?post=375084"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}