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World faces refinery overcapacity: Should Indian refiners rethink expansion plans?
Nov 06:
Even as Indian refineries begin a massive expansion of their capacities, the projection is that the world will have a refining over capacity by 2025. And surplus capacity is projected all the way till the year 2040
8Around 2.1 million barrels per day of refining capacity may have to be shut by 2025. Unless a hefty duty protection is available to Indian refineries, and the oil marketing companies can run the new capacity at global scale and efficiency, they might run into a serious road block.
8In the context of these fresh projections, should refining capacity expansions in India be re-examined?
8Those which run on doles, such as the Numaligarh refinery expansion which gets a 50% excise duty relief and various other concessions, and for which crude is going to be ferried all the way from Paradip and the finished product sent back through a parallel pipeline to the mainland from Upper Assam where the refinery is located, may become unviable even as it is built.
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8Around 2.1 million barrels per day of refining capacity may have to be shut by 2025. Unless a hefty duty protection is available to Indian refineries, and the oil marketing companies can run the new capacity at global scale and efficiency, they might run into a serious road block.
8In the context of these fresh projections, should refining capacity expansions in India be re-examined?
8Those which run on doles, such as the Numaligarh refinery expansion which gets a 50% excise duty relief and various other concessions, and for which crude is going to be ferried all the way from Paradip and the finished product sent back through a parallel pipeline to the mainland from Upper Assam where the refinery is located, may become unviable even as it is built.
Click on Details for more
