Refining giant Indian Oil Corp (IOC) is preparing for a future when batteries will increasingly replace car fuel tanks but for the moment is investing Rs 45,000 crore to expand its refining capacity to meet the rapidly rising fuel consumption in the country.
The rapid progress in battery technology and a big customer cheer Tesla, the battery-car innovator, received recently has strengthened hope battery-powered cars may within decades replace conventional cars on most roads and end the dominance of fossil fuel in transportation.
“At this point of time, I don’t see Tesla totally changing the world because projections do not indicate that,” B. Ashok, chairman, Indian Oil Corp told ETin an interview. “We believe that looking at that (Tesla) as a threat we should not stop our activities because that will be a bigger threat. If it doesn’t transform the world as it is expected to, and we still have to depend on the conventional energy, there should not be a shortage of energy available at that point of time because I today fear that if I set up a refinery, maybe after ten years the refinery will have no meaning.
I can’t take that stance.” With a capacity of 80,000 million tonne of refining capacity, 35% of India’s total, Indian Oil Corp is the country’s largest refiner. It also has 25,000 filling stations, nearly half of the nation’s total.
The company plans to raise its refining capacity by a quarter with an investment of Rs 45,000 crore in brownfield expansion, debottlenecking and fuel quality upgrade projects in the next five to seven years. Under this, its freshly-built Paradip refinery will expand to 20 million tonne from 15 million tonne today, so will its Panipat facility. The company plans to invest heavily in fuel marketing and distribution infrastructure as well as exploration and production.
India’s fuel consumption grew 11% in 2015-16 and is expected to rise more than 7% in the current fiscal. While big investments are underway at Indian Oil Corp, what has changed is the way the projects are evaluated. “Instead of purely looking at whether it makes commercial sense for us to take up some projects, we have started having these conversations whenever we look at any proposal that how sustainable this is? So if the business is going to be altered in the future because of any change in demand trend and so on, to what extent will our investment which we are making ensure that there is no redundancy of that,” Ashok said.
So if petrol and diesel were to run out of car owners’ favour tomorrow, the refinery should be flexible enough to tweak its output to be able to supply more raw material to the company’s growing petrochemicals business, he said. The company is also investing heavily in research and development in this regard. Doug Middleton Authentic JerseyShare This