IOC's Paradip refinery to boost profits by 20-30%

With the Rs 35,000-crore newly-built Paradip refinery going on stream, Indian Oil Corporation (IOC)-the country's biggest oil marketing company- has gained a coastal advantage that will boost is profits by as much as 20-30 per cent in the coming months.

"The testing and trial runs of various units have now been completed and by the end of this month the refinery will start operating at 60 per cent of its 15 million-tonne capacity," Paradip Refinery executive director GS Singh said.

During the next financial year, production will be stepped up to 80 per cent of its capacity after which it will be increased to 100 per cent, he added.

The Paradip refinery will give the highest gross refining margins to IOC as its coastal location will enable the company to operate with a much lower crude oil inventory than the inland refineries at places like Panipat, Mathura, Koyali and Barauni. As a result, financial cost of operating the refinery will be much lower.

Singh said that the state-of the-art equipment installed at the refinery also gives it the advantage of processing a very wide variety of crudes. The refinery has the capability of processing crude oil with a very high sulphur content, which can be purchased at lower prices, into high-quality petroleum products. Indigenous INDMAX technology has been incorporated in the refinery to suit the country's needs, he added.

The Paradip refinery is currently geared to produce Bharat stage IV auto fuels, but with an investment of another Rs 4,000 crore, the products can be upgraded to the Bharat VI norms, which the government has decided to introduce in 2020. "We have already started planning for this," Singh told MAIL TODAY.

Petrol, diesel, LPG and kerosene produced at Paradip will be marketed in the eastern and southern states. The movement of the products will take place mainly through pipeline and ships along the coast. A new pipeline between Paradip and Hyderabad is under construction for easier market access to the southern region.