India plans to ramp up its oil refining capacity to become a major exporter of petroleum products and use export earnings to partly cover its import bill, Petroleum Minister Mani Shankar Aiyar said on Wednesday.
The "export-blueprint" envisages converting present and planned coastal refineries into export-oriented refineries with large capacities so that export earnings pay for import of crude oil and gas, he told reporters in Karachi.
India spent Rs 117,032 crore (Rs 1170.32 billion) on import of crude oil in 2004-05, while its earnings from export of petroleum products was Rs 14,950 crore (Rs 149.5 billion) -- making it the fourth biggest revenue earner through exports for the country.
Given this backdrop, the petroleum ministry is bullish on a strategy to compete with Singapore and Middle East refineries in the international arena.
Under the new strategy, coastal refineries, which are economic and competitive compared to neighbouring overseas refineries, would be equipped to focus on exports, while new inland refineries would be built soon to meet the hinterland demand-supply gap.
Currently the government incurs huge expenditure on account of moving petroleum products from coastal refineries to the hinterland.
Aiyar said possibilities of ramping Hindustan Petroleum Corp's Vizag refinery capacity to 25 or 30 million tonnes per annum from the present 7.5 million tonnes and scaling up Indian Oil Corp's proposed Paradip refinery to handle 50-60 million tonnes per annum would be explored.
"Why don't we build large refineries? I want the scale of public sector refineries to be larger than the single private sector refiner," he said.
Reliance Industries' 33 million tonnes per annum refinery at Jamnagar in Gujarat is India's single largest refinery.
Compared to that, IOC's Koyali refinery, with a capacity of 13.7 million tonnes per annum, is the largest in the public sector.
Aiyar wants the inland refineries proposed at Bina in Madhya Pradesh and Bhatinda in Punjab to be quickly implemented to meet the hinterland demand, while the resulting surplus at the coastal refineries be exploited to the hilt by exporting their products.
India's installed capacity of 126 million tonnes exceeded the domestic demand of 108 million tonnes, resulting in exports that have grown from 8.4 million tonnes in 2000-01 to 17.3 million tonnes in 2004-05.
The coastal refineries have been exporting surplus petrol, diesel, naphtha, fuel oil to sustain their profits as well as earn foreign exchange.