Indian Oil, Hindustan Petroleum, Bharat Petroleum, and GAIL have exceeded their capital expenditure targets for the current fiscal, having spent heavily on refinery upgrades, pipelines, and marketing infrastructure. The combined capex target set for all state-run oil producers, refiners and marketers for 2018-19 is Rs 893.35 billion, of which they have collectively spent Rs 827.11 billion, or about 93%, in the 11 months through February.
Explorer Oil and Natural Gas Corp, which typically has much higher spending budget every year than the refiners, has spent about 80% of its annual target of Rs 320 billion. Its overseas arm, ONGC Videsh, has used up about 85% of its Rs 58.90 billion targets, while another state-run producer, Oil India, has spent 78% of its target of Rs 43 billion. Gas marketer GAIL and refiners Indian Oil, HPCL and BPCL have surpassed their annual target in 11months. BPCL has spent Rs 89.93 billion, or 121% of its target.
GAIL, which is investing heavily in laying a gas pipeline in eastern India, had spent Rs 50.59 billion until February, or 107% of its target for the year. HPCL has already used up Rs 89.38 billion, or 106% of its annual outlay. Indian Oil, the nation’s largest refiner, and fossil fuel retailer, has invested Rs 234.92 billion, or 103% of its target. Refiners have been upgrading their facilities to produce lower-emission fuels that will help curb intense air pollution in cities. They have also been spending on setting up new pipelines, depots, and retail outlets.
Indian oil companies have been investing heavily in finding, refining and distributing oil and gas across the country for the last many years to meet mounting demand for fuel and feedstock. Meanwhile, economic expansion has pushed up oil demand by 3.2% during April-Feb of 2018-19. India is also hoping to increase its domestic oil output and reduce its dependence on import by making massive investments in exploration and production. Domestic crude oil output has been declining for years. India imports about 80% of the oil and about half of the natural gas it consumes. The import bill of crude oil is estimated to expand 27% from $88 billion in 2017-18 to $112 billion in 2018-19.
