India's petroleum product exports are projected to increase by around 25% from the FY25 level of $44.4 billion, according to reports from The Times of India. The growth is expected to come over the next few years as new refining capacity becomes operational by December 2026 through Indian Oil Corporation's (IOCL) largest expansion programme to date. Despite importing around 90% of its crude oil requirement, India has established itself as one of the world's largest exporters of refined petroleum products through its sophisticated refineries. As per Economic Times, IOCL's expansion will significantly raise India's petroleum product export share, with the company stating that whatever surplus capacity remains after meeting domestic needs will be directed toward exports.
The state-owned refiner IOCL's capacity enhancement will raise its total refining capability from the current 80.75 million metric tonnes per annum (MMTPA) to a record 98.05 MMTPA, as reported by The Times of India. The company has already spent more than ₹53,500 crore under the ₹75,000 crore expansion programme. The project spans IOCL's refineries at Panipat, Vadodara and Barauni, with Panipat's capacity expanding from 15 MMTPA to 25 MMTPA, Vadodara increasing from 13.7 MMTPA to 18 MMTPA, and Barauni rising from 6 MMTPA to 9 MMTPA. All three expansion projects are slated to be commissioned during November-December 2026. According to Economic Times, the expansion covers the company's Panipat, Vadodara and Barauni refineries, where capacities are being raised to 25 MMTPA, 18 MMTPA and 9 MMTPA respectively.
At present, India's refining industry has an installed capacity of around 258.1 MMTPA, compared with domestic petroleum product consumption of approximately 239 MMTPA, according to The Times of India. In practice, refineries generally operate at 105-115% of their installed capacity, resulting in actual annual production of close to 300 million tonnes. Of this, roughly 61.5 million tonnes represents surplus output that is shipped to overseas markets. Reliance Industries accounts for nearly 70% of the country's refined fuel exports through its 70 MMTPA Jamnagar refinery, the world's largest refining complex at a single location. As per Economic Times, this makes India one of the world's largest suppliers of refined fuels, with the company noting that if demand rises significantly in India, there may not be major exportable surplus on a sustained basis from refining systems.
The capacity enhancement could raise IOCL's export share to about 15% of total revenues from the current 5%, according to a senior official at IOCL quoted by The Times of India. However, the company emphasizes that domestic requirements remain the priority, with no fixed export targets. By the end of 2026, IOCL is expected to add another 17.3 MMTPA of refining capacity. Should the incremental output be sold overseas, it could provide a significant boost to India's petroleum product exports, further reinforcing the country's standing as a global refining hub while increasing foreign exchange earnings. As per Economic Times, the expansion comes as global refining capacity additions remain limited and disruptions in Russia and the Middle East continue to support refining margins.
