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IOC’s Rs. 6.11bn Malkapur Petroleum Terminal likely to go Onstream in 2023

A petroleum terminal being set up by Indian Oil Corporation in Malkapur, near Hyderabad, with an investment of Rs. 6.11 billion, is likely to go onstream next year.


As it will be the culminating point for the 1,212-km Paradip-Hyderabad product pipeline, the terminal is expected to provide Indian Oil leverage in terms of fuel supplies in Telangana. “By December 2023, we will be able to commission the terminal... bring our own product,” said Executive Director and State Head of India Oil for Telangana and Andhra Pradesh B. Anil Kumar.


The terminal will have a storage capacity of 1,80,000 kilolitres.


Once commissioned, the pipeline and terminal are expected to reduce reliance of Indian Oil on Hindustan Petroleum Corporation’s Visakhapatnam-Hyderabad pipeline for fuel supplies in Telangana. Indian Oil will also be shifting operations of its terminal in Cherlapally, near Hyderabad. The Cherlapally facility is, however, unlikely to be shut, he added.


To queries, he said petrol and diesel consumption in Telangana surpassed pre-COVID retail sales levels. Petrol consumption during April-November was 13.2% higher compared to the same period last fiscal. Retail diesel usage was 10.2% more in the same period. Average monthly sales is around 1,23,000 tonnes petrol and 2,66,000 tonne a diesel.


While petrol offtake is growing on the back of Hyderabad and surrounding areas expanding, growth in diesel consumption is stunted in Telangana and Andhra Pradesh because of higher value-added tax levy in the two States. “The price disparity is high because of local taxes,” Mr. Anil Kumar said, citing how heavy vehicles plying interstate prefer to tank up at retail outlets in neighbouring Maharashtra, Karnataka and Odisha to benefit from the lower prices.


Listing out Indian Oil initiatives in Telangana, he said under SATAT (Sustainable Alternative Towards Affordable Transportation) programme that encourages entrepreneurs to set up compressed biogas plants for supplying CBG to oil companies, IOC has issued seven LOI for setting up of such facilities in Telangana. Three of them will come up in Hyderabad and one each in Jangaon, Mahbubnagar, Medchal and Warangal. The CBG purchased from the plants would be marketed through Indian Oil’s retail outlets.


Besides Cherlapally, the company has a storage facility in Ramagundam. The two installations together have a capacity of 1.186 million KL of petrol and 4.256 million KL of diesel. The company, which has 1,425 retail outlets, commissioned 337 new ROs in last 3 years. In the current fiscal, it will be adding 168 ROs.


On ethanol blending with petrol, he said Indian Oil has achieved 10% blending in both Telangana and Andhra Pradesh. It is, however, not pursuing plans to set up ethanol refineries following government of India directive that private entrepreneurs should be allowed to set up such facilities.


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