PM Modi Says India Will Continue Expanding Refining Capacity: Report

The facility increases India's refining capacity at a time when refinery closures and slower investment have become common across several Western countries.

India, currently the world's fourth-largest refiner, is expected to expand refining capacity to 6.2 million barrels per day by the end of the decade as companies replace older units with larger and more efficient facilities.

Source : ANI

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Key points generated by AI, verified by newsroom

• Prime Minister Modi inaugurated new refinery for energy security.
• Rajasthan's $8.3 billion refinery boosts India's processing capacity.
• Expansion reflects India's strategy amid rising global fuel demand.

Prime Minister Narendra Modi on Saturday said India will continue building new crude oil refineries to strengthen the country's energy security, even as several Western nations scale back refining capacity.

Speaking after inaugurating India's first new refinery in a decade, Modi noted that no new refinery has been built in the United States over the past five decades, while refining capacity in Europe has continued to decline, Bloomberg reported.

"No new refinery has come up in the US in the last five decades and capacity in Europe has also been constantly declining," Modi said, adding that India would continue expanding its refining capacity.

Rajasthan Refinery Adds Major Capacity

The newly inaugurated 180,000-barrels-per-day greenfield refinery in Rajasthan's Thar desert has an annual petrochemical production capacity of 2.4 million tonnes and was built at a cost of $8.3 billion.

According to BloombergNEF analysts, it is likely to be the only new refinery commissioned globally this year.

The facility increases India's refining capacity at a time when refinery closures and slower investment have become common across several Western countries.

India Bets On Long-Term Fuel Demand

The expansion reflects India's strategy of investing in oil-processing infrastructure on the expectation that strong domestic fuel demand, slower-than-expected electric vehicle adoption and exports of refined petroleum products will continue to support the sector.

BloombergNEF analyst Claudio Lubis said, "The Barmer refinery adds a highly complex refining capacity in one of the world's long-term oil demand growth drivers."

He added that India is expected to lead global refinery capacity additions between 2026 and 2030, increasing capacity by more than one million barrels a day, accounting for nearly one-fourth of global additions by the end of the decade.

Strategic Importance After Iran Conflict

The refinery assumes added significance following the Iran conflict, which raised concerns over potential disruptions to crude oil shipments through the Strait of Hormuz.

While the new facility does not reduce India's dependence on imported crude oil, it expands the country's ability to process a wider range of crude grades, strengthen domestic fuel supplies and support refined product exports.

Referring to recent global supply disruptions, Modi said, "It is because of investments in projects like this that India has been able to navigate the biggest oil supply shock in history."

He added that while several countries rationed fuel supplies and increased prices following the closure of the Strait of Hormuz, India's investments over the past decade helped ensure adequate fuel availability.

Joint Venture Between HPCL And Rajasthan Government

The Rajasthan refinery is a joint venture between Hindustan Petroleum Corporation Ltd. (HPCL) and the Rajasthan government.

The refinery will primarily produce diesel, petrol and petrochemicals while processing around 150,000 barrels of imported crude oil per day.

Commercial operations at the facility began on June 22.

India's Refining Capacity Set To Rise Further

The new project increases India's installed refining capacity by around 3.5 per cent, taking it to 5.4 million barrels per day.

India, currently the world's fourth-largest refiner, is expected to expand refining capacity to 6.2 million barrels per day by the end of the decade as companies replace older units with larger and more efficient facilities.