Indian Oil Corp. is confident the share of oil in India’s energy basket won’t change drastically over the next two decades, although incremental demand will create room for new and cleaner forms of energy, its chairman Shrikant Madhav Vaidya told the India Energy Forum by CERAWeek Oct 21.
The state-run refiner, which caters to more than 40% of the country’s fossil fuel demand, said it would be investing billions of dollars to pursue refining expansion, while making inroads into the production of hydrogen and biofuels.
“When energy consumption will go up, I do not think it can displace oil,” Vaidya told the India Energy Forum. “Today, oil is about 28% of the energy mix and whatever forecast you read, you will see that oil will remain around this level for the next two decades.”
Since India’s per-capita energy consumption is about one-third the global average, demand is expected to rise exponentially, creating the need to push both refining expansion as well as clean energy initiatives, he said.
But Vaidya recently told S&P Global Platts that IOC would be looking to enhance its petrochemical integration to 15% of petrochemicals intensity index by 2030, from about 4.0%-4.5% currently.
That would provide a cushion for the future in the event demand for transport fuels slows due to the transition to cleaner forms of energy.
“We are poised for big growth in conventional fuels. I will be selling petrol for many, many decades to come. We are strengthening our core business of refining,” Vaidya said, adding that IOC was looking to boost its annual refining capacity to 105 million tonnes by 2024/25 from 80.5 million tonnes now.
But most of its refinery expansion projects won’t have captive power plants. Instead, they will have much lower carbon footprint because of the use of green power, Vaidya said. Vaidya said domestic demand for both diesel and gasoline had bounced back to pre-pandemic levels, while jet fuel demand would be back on track once international travel opened up. “Maybe in a quarter of a year’s time, we will be back at 100% capacity utilization of the refineries. Today, I am about 95%,” Vaidya added.