Diesel exports from India are expected to see a big jump next year. This will coincide with the opening of new refining capacity, which will provide much-needed fuel to markets from the US to Europe, where there are currently severe shortages. State-owned refiners will increase their diesel production capacity by at least 15 million tonnes per year through new refineries and expansion of existing plants, India’s Petroleum Minister Hardeep Singh Puri said on Tuesday. Speaking to reporters during an industry conference in Goa, Puri said that we will be in a happy situation where we will be able to refine diesel not only for our needs but for the entire world.
The Middle East and the Russia-Ukraine war have affected crude oil and fuel supplies, causing global fuel shortages and driving up prices. Following attacks on refineries and ports in Russia, Russia halted exports in July to protect domestic supplies, exacerbating diesel shortages. Due to this shortage, diesel prices in the US have reached record levels. This led Washington to consider banning exports, but then President Donald Trump brokered a deal with Russian President Vladimir Putin, agreeing to make more fuel available on global markets.
A big opportunity for India
This upheaval has created a great opportunity for India. India is already one of the world’s largest suppliers of diesel. Diesel is an important fuel that is required for farms, factories and heavy transport. According to ‘Kpler’ data, this year India has overtaken Russia to become the world’s second largest diesel exporter. India’s share of the global fuel market could be further strengthened by refinery expansion, as Goldman Sachs Group Inc. Fuel supplies are projected to remain tight (limited) until 2027.
Refineries are expanding
Arvinder Singh Sahni, the chairman of the country’s largest refiner company ‘Indian Oil Corporation’, said that the company is going to complete the expansion work in its three refineries. This will increase crude oil processing capacity by more than 1.7 crore (17 million) tonnes and is expected to produce 90 lakh (9 million) tonnes of additional diesel per year from next year. Hindustan Petroleum Corporation Chairman Vikas Kaushal said that when their new refinery in Rajasthan (which has an annual capacity of 90 lakh tonnes) will operate at full capacity, the company’s diesel production will increase by about 40 lakh (4 million) tonnes. At the same time, ‘Numaligarh Refinery Limited’, a unit of ‘Oil India Limited’, will also increase production of this fuel to about 30 lakh (3 million) tonnes. Meanwhile, chairman Sanjay Khanna said Bharat Petroleum Corporation hopes to add 1.5 million tonnes of additional capacity by 2028.
59 million tonnes of fuel produced
According to oil ministry data, Indian refineries produced 59 million tonnes of fuel in the first half of the fiscal year that began in April, while domestic consumption stood at around 46 million tonnes. Puri said the country’s total refining capacity, which is currently around 267 million tonnes per annum, will increase to 300 million tonnes and reach 400 million tonnes in a few years. X-Analysts Founder, CEO and Chief Oil Analyst Mukesh Sahdev said India’s refining scale will be a strategic advantage for it.
