IOC’s Strategic Investment: Oil Major Plans Rs 1.66 Lakh Crore Allocation Over 5 Years
Indian Oil Corporation (IOC), India’s leading fuel retailer, has announced a substantial investment plan of ₹1.66 lakh crore over the next five years. This initiative aims to enhance its refining and fuel marketing capabilities while also expanding into petrochemicals, natural gas, and renewable energy sectors. Chairman Arvinder Singh Sahney shared these insights during the company’s annual meeting, highlighting the strategic focus on meeting the growing demand for auto fuels alongside the global energy transition.
Expansion of Refining Capacity
IOC plans to increase its refining capacity from the current 80.75 million tonnes per year to 98.4 million tonnes by 2028. This growth will be driven by expansion projects at key locations, including Panipat, Gujarat, and Barauni. Sahney emphasized the company’s commitment to investing ₹1.66 lakh crore, which will primarily target the petrochemicals, natural gas, and renewable energy sectors. This strategic move is designed to balance the rising demand for auto fuels in India with the ongoing global shift towards sustainable energy solutions.
To support these ambitious plans, IOC is also expanding its extensive pipeline network from 20,000 kilometers to 22,000 kilometers through 21 ongoing projects. This includes the development of new storage facilities in Nepal. The company aims to boost its petrochemicals business significantly, increasing production from 4.3 million tonnes to over 13 million tonnes annually by 2030. A particular focus will be placed on specialty chemicals to reduce imports and enhance profit margins.
Diversification into Green Energy
In addition to its core operations, IOC is diversifying into green energy with a substantial investment of ₹2.5 lakh crore aimed at achieving net-zero operational emissions by 2046. This includes initiatives such as green hydrogen production, sustainable aviation fuel, and a significant increase in renewable power capacity from 1 GW to 18 GW within three years. The company is also enhancing its fuel station network, which exceeds 40,000 locations, by adding electric vehicle (EV) chargers, battery-swapping facilities, and CNG/LNG dispensing outlets.
Sahney noted that IOC is sharpening its focus on improving throughput per outlet and exploring non-fuel retail opportunities. The company is also venturing into emerging segments such as bitumen, bunkering, and LNG-based shipping. Furthermore, IOC is investing in coastal infrastructure and data transmission services, ensuring that every investment is made with long-term value creation in mind.
Market Leadership and Innovations
IOC continues to maintain its leadership position in the LPG market, holding a 45% share. The company has recently introduced BIS-certified 5 kg Chhotu Master cylinders, with the first retail outlet launched in Ahmedabad. Additionally, it has rolled out innovative products like XtraBoost nano-additized AutoLPG and Propane Plus for industrial customers. The reach of IOC’s Servo lubricants has expanded to 45 countries, further solidifying its market presence.
In the aviation fuel sector, IOC retains a commanding 54.5% market share and has opened new fueling stations in Srinagar and Rewa. The company’s natural gas volumes have surged by 20%, reaching 7.9 million tonnes annually, supported by global sourcing agreements. Its city gas business has expanded across 49 geographical areas in 21 states. Beyond energy, IOC is also making strides in the explosives sector with new plants in Neyveli and projects in Telangana and Maharashtra.
Challenges and Resilience
Sahney acknowledged the challenges facing the global energy sector, including the ongoing Russia-Ukraine conflict, tensions in the Middle East, and disruptions in the Red Sea. These factors, along with new U.S. tariff hikes, have impacted trade flows. Despite these challenges, IOC has achieved significant milestones, surpassing 100 million tonnes in sales and serving over 32 million customers daily through its retail network. The company also supplies LPG to 150 million kitchens across India, demonstrating its resilience and commitment to meeting the energy needs of the nation.
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