The State-run Indian Oil, the country's largest refiner, will sign a deal with Malaysian oil firm Petronas to import one and a half million tonnes of crude, the IOC chairman said yesterday. “We will sign the contract on June 10,” M.S. Ramachandran told reporters.
Meanwhile, India's crude oil imports will rise at least six per cent in 2002/03 to match an expected rise in demand for refined petroleum products, a top oil ministry official said yesterday.
Crude imports were estimated to rise to 85-90 million tonnes or 1.7-1.8 million barrels per day in the year to March 2003 from 80 million tonnes or 1.6 million bpd in the previous fiscal year, Petroleum Secretary B.K. Chaturvedi told reporters.
"We anticipate a demand increase of three to five per cent. So if that is the demand, then the crude imports required would be about 85-90 million tonnes," he said.
India's petroleum product sales dipped one per cent to 88.9 million tonnes in 2001/02. Diesel sales, which account for about 40 per cent of all products, fell 3.4 per cent to 36.6 million tonnes because of an economic slowdown.
Chaturvedi said oil demand was expected to rise as the Indian economy was likely to grow faster in the current fiscal year.
"We expect the economy to turn around this fiscal year. So we expect a good growth in demand because there is a one-to-one co-relation with the economy," he said.
Chaturvedi said India's refining capacity was projected to rise to 2.8 million bpd in the next five years. "That is the projection. It will be reviewed from time to time."
Falling demand in the last two years has forced oil companies to review their planned expansions, which were based on expectations of a higher rise in sales.
India, once Asia's largest diesel buyer, became an exporter after Reliance Petroleum set up its 540,000-bpd refinery at Jamnagar in western India three years ago.
India imports about two-thirds of its crude oil requirement for its 17 refineries that have a capacity to process 2.3 million bpd of crude oil.