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Fuel demand in the world’s third-largest crude oil importer, India, is set to rise by between 4% and 5% per year for the “foreseeable” future, G. Krishnakumar, chairman of India’s state-controlled refiner Bharat Petroleum Corporation Ltd (BPCL), said on Friday.
At the same time, Indian consumption of petrochemicals is expected to increase at an even higher rate, by 7% to 8% each year in the foreseeable future, Krishnakumar told BPCL’s shareholders, as carried by Reuters.
To meet growing demand for refined oil products and petrochemicals, many Indian refiners plan to expand their crude processing capacities and ethylene cracker units at refineries.
In BPCL’s case, the refiner plans to boost its integrated refining and petrochemical capacities over the next five to seven years to meet rising demand, Krishnakumar said.
BPCL is in talks with major local banks to secure a loan of about $3.8 billion which it will use to expand the capacity of one of its refineries, Bloomberg reported earlier on Friday, quoting sources with knowledge of the discussions.
BPCL is looking to raise around $3.8 billion (320 billion Indian rupees) from lenders to boost the capacity of its Bina refinery in the Madhya Pradesh state in central India, according to Bloomberg’s sources.
The refiner has planned to invest a total of $5.8 billion (490 billion rupees) to add an ethylene cracker unit at the Bina refinery as BPCL and other Indian refiners are looking to raise their petrochemicals production capacities.
India has said it expects to raise its refining capacity by around 1.12 million barrels per day (bpd) each year until 2028 as it seeks to meet rising fuel demand. Total Indian refining capacity is expected to increase by 22% in five years from the current 254 million metric tons per year, which is equal to around 5.8 million bpd.
