Petroleum refining capacities to rise to 240 million tonnes by 2012

India's oetroleum refining capacity  is expected to rise to 240 million tonnes per annum (MTPA) by next March from the 188 MTPA currently, enabling the country to export 90 MMTPA of petroleum products to the US and Europe.

According to S. Sundareshan, secretary, ministry of petroleum and natural gas, about Rs.60,000 to Rs.65,000 crore will be invested in new refining capacities over the next year. India's domestic demand for petroleum products is currently placed at around 140 MTPA.

Four new refineries are expected to go on-stream over the next one year, adding to the capacities. These include the refineries of three state-owned companies: Bharat Petroleum's Beena refinery, Hindustan Petroleum's refinery in Bhatinda and Indian Oil Corporation's refinery in Paradip.

The Nagarjuna group's refinery at Cuddalore is also expected to go on stream, while the expansion of Mangalore Refinery and Petrochemicals Ltd will be completed over the next few months.

In February, refineries in India produced 13.4 million tonnes of products, which was 3.2 per cent higher than a year earlier. Indian Oil, the largest refiner, produced 4.34 million tonnes, while Reliance Industries – which operates the world's biggest refining complex at Jamnagar in Gujarat – produced 2.67 million tonnes of fuel. Hindustan Petroleum saw a nearly seven per cent growth in production to 1.33 million tonnes.

According to Sundareshan, the under-recoveries of state-owned oil marketing companies (OMCs) could cross the Rs.2 lakh crore-mark in the current fiscal, if crude prices continued to remain at high levels. During 2010-11, OMCs saw under-recoveries of Rs.78,000 crore. Crude oil prices are hovering at around $120 a barrel.

OMCs sell petroleum products such as diesel, kerosene, liquefied petroleum gas (LPG) and even petrol at subsidised prices, though the administered pricing mechanism was dismantled many years ago. The petroleum secretary claimed that the OMCs were making profits as the government had compensated hem for the loss sustained on account of under-pricing.

Referring to LPG supplies, Sundareshan said about 50 per cent of the population had been covered so far and the government aimed to extend it to 75 per cent of the population by 2015.