India's top oil firm Indian Oil Corporation (IOC) on Friday said it will invest close to Rs 1 lakh crore to raise its refining capacity by almost a third in the next 4-5 years as it saw fuel demand continuing to grow in near future. Addressing the company's annual meeting of shareholders, IOC Chairman Shrikant Madhav Vaidya said petrol demand is already back at pre-COVID levels and diesel, the most used fuel in the country, should return to normal levels by Diwali.

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"Forecasts by various agencies see Indian fuel demand climbing to 400-450 million tonne by 2040 from the present 250 million tonne. This offers enough legroom for all forms of energy to co-exist," he said. To cater to that demand surge, IOC is aggressively rolling out new projects. "These translate into refining capacity expansion of over 25 million metric tonne per annum, including (subsidiary) CPCL, and an investment commitment of close to Rs 1 lakh crore over the next 4 to 5 years," he said.

IOC operates 11 refineries that convert crude oil into valued fuels such as petrol and diesel. These have a combined capacity of 81.2 million tonne. It plans to raise the capacity of its Koyali refinery in Gujarat to 18 million tonne from the current 13.7 million tonne while the same at Panipat refinery in Haryana is planned to go up to 25 million tonne from the current 15 million tonne.

Expansion is also planned at Guwahati and Barauni refineries while a new plant is being built at the subsidiary, Chennai Petroleum Corp Ltd (CPCL). These expansions will take IOC's refining capacity to 106.7 million tonne.

Vaidya said IOC is focusing on optimally integrating current refining processes to yield more chemical products per barrel of oil. "This will intensify petrochemical and lubricant integration leading to a diversified product portfolio and attain profit maximisation." "In fact, integration projects, like the upcoming Styrene Monomer Project at Panipat or the Lube Integration Project at Gujarat Refinery will also reduce India's import dependence and strengthen the promise of an Aatmanirbhar Bharat," he said.

While it expands the oil business, IOC is also focused on using green energy to power new projects and expansions. "Indian Oil is charting its course as a future-ready global energy giant and we are working on a range of scalable alternative energy options to realise the vision," he said adding CNG and LNG as fuel for automobiles, hydrogen-spiked CNG for long-haul buses, biofuels, hydrogen and e-mobility solutions are being explored.

The company has tied up with Israeli company Phinergy to manufacture Aluminium-Air batteries for EVs in India. "Leading automobile companies have shown keen interest in the technology and prototype integration and field trials are expected to commence soon," he said. "This collaboration has potential advantages for India, including a viable and affordable e-mobility solution by leveraging the abundant aluminium reserves in the country." On hydrogen initiative, he said IOC will build the nation's first 'Green Hydrogen' plant at Mathura refinery.

Also, the firm is teaming up with Malaysia's state-owned oil and gas firm Petronas to expand the business scope of the existing joint venture company, IndianOil Petronas Pvt Ltd to include LNG terminals, CNG stations, CGD projects, CBG business and retailing of transportation fuels. "We are pursuing more such win-win associations with respective segment leaders to explore newer avenues of growth and gain competitive advantage in the future," he said.

Vaidya said with the recovery in the overall demand, refining and other related operational parameters have demonstrated an even more pronounced turnaround compared to the previous year. For the first quarter of this fiscal year, IOC achieved a refinery run of 88.6 percent as compared to 68.5 percent in Q1 of 2020-21.

"As I say this, the sales volume of petrol has already crossed pre-COVID level, with diesel likely to reach there in the next 2-3 months, say by Diwali," he said.