Bharat Petroleum Plans Rs 1-Lakh-Crore Expansion Over Five Years
Bharat Petroleum Corporation Ltd. is planning to invest Rs 1 lakh crore over the next five years for refinery upgradation, marketing infrastructure, petrochemicals production and city-gas distribution.
This will help the company expand its refining capacity to 50 million metric tonnes in five years and gas production to 5 million metric tonnes in four years, Chairman and Managing Director D Rajkumar told BloombergQuint in an interview.
As of March 2018, total crude oil processed by the company’s group refineries was 31.35 million metric tonnes, at a capacity utilisation of over 117 percent. Its gas production stood at 1.87 million metric tonnes.
The state-run oil marketer plans to spend Rs 7,400 crore in the ongoing financial year. “This is for the ongoing projects, especially for the Kochi and Mumbai refineries as well as some marketing projects,” Rajkumar said.
BPCL completed its integrated refinery expansion project at Kochi, which increased its capacity from 9.5 million metric tonnes per annum to 15.5 million metric tonnes per annum. The company also plans to upgrade its Mumbai refinery from 12 million metric tonnes per annum to 14 million metric tonnes per annum. Besides, it’s looking to expand the capacity of its Assam-based Numaligarh refinery from 3 million metric tonnes per annum to 9 million metric tonnes per annum, Rajkumar said.
The company, he said, is planning to expand the capacity of Bina refinery to 15.5 million metric tonnes per annum in four years. “That’s in the initial stages.”
Bina refinery—a 50:50 joint venture between Oman Oil Company Ltd. and BPCL—is also looking for potential investors as Oman Oil plans to offload part of its stake. “The KPC (Kuwait Petroleum Corporation) could be a potential partner but that depends on how it’s going to pan out in the days to come,” Rajkumar said.
Rising Oil Prices
As oil prices peaked in the country, the oil-marketer said the government had not asked them to absorb the hike yet.
“There is no communication from the government, whatsoever, at this point in time to absorb the prices,” Rajkumar said. “Currently, we are passing on the prices.” There are no plans to absorb either, he said.
The tax component, he said, was on the higher side for oil. Citing the instance of Mumbai, Rajkumar said the taxes were as high as 40 percent for the high-speed diesel variant and 50 percent for the motor spirit-variant. In India, taxation on oil is ad-valorem, which means that as oil prices surge, the taxes levied also rise.