State-run Bharat Petroleum Corporation (BPCL) plans to build a new 12 million metric tonnes per annum (MMTPA) refinery in India, according to two industry officials. The oil company will invest around ₹50,000 crore and is considering locations in Andhra Pradesh, Uttar Pradesh, and Gujarat.
“BPCL is looking to set up another refinery either on the east or west coast to meet the growing fuel demand,” said one of the officials. Talks are still in the early stages.
BPCL did not respond to an email query by press time on Monday.
Last month, BPCL chairman G. Krishnakumar said the company aims to increase its refining capacity to 45 MMTPA by FY29. Currently, BPCL operates three refineries in Mumbai, Kochi, and Bina (Madhya Pradesh) with a combined capacity of around 36 MMTPA.
BPCL plans to invest about ₹1.7 lakh crore over the next five years in oil refining, fuel marketing, petrochemicals, and clean energy. Of this, ₹75,000 crore is earmarked for refineries and petrochemicals projects, ₹8,000 crore for pipeline projects, and over ₹20,000 crore for its marketing business.
The second official mentioned that BPCL is planning a new refinery because a proposed 60-MMTPA refinery and petrochemicals complex in Maharashtra did not materialize. The project, which was to be Asia’s largest refinery, faced environmental concerns and opposition from local residents.
India’s fuel demand hit a record high of about 233.276 million tonnes in FY24, up from 223.021 MT the previous year. To meet this growing demand, India aims to increase its refining capacity by nearly 80%, from 252 MMTPA to 450 MMTPA by 2030.
The country is focusing on smaller refineries, which face fewer hurdles like land acquisition and regulatory clearances. Analysts note that while global fuel demand is rising, many old refineries in Europe and the US are shutting down.
“Refineries worldwide are closing, which may lead to a crisis of finished products,” said one of the officials. “India can step in and become a refining hub for the world, but we need to add more capacity.”
A Goldman Sachs report from May 27 highlighted that many international refineries closed between 2020 and 2022 due to the Covid-19 pandemic, poor economics, regulatory changes, and geopolitical tensions. The report added that a significant portion of global refining capacity is at risk of closure, particularly in Europe.
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