After five years of expansion, Indian Oil’s Gujarat refinery in Vadodara is yet to fully utilise its targeted 18 million tonne-a-year crude-processing capacity, with the downstream units needed to convert crude into finished fuels, lube base stocks and petrochemicals expected to be commissioned only by the end of FY27.
The refinery currently processes somewhere between its old 13.7 mtpa capacity and the expanded 18 mtpa level, Biplob Biswas, the company’s Executive Director and Refinery Head, said on Wednesday.
“We can process 18 mtpa of crude even today. But every refinery has primary processing of crude and all the products we obtain from our crude unit go for secondary processing. Since our secondary processing is not ready, we will touch 18 mtpa once we complete the secondary processing by the end of this fiscal,” he said.
The constraint comes as Indian Oil enters the final phase of its ₹17,825-crore Petrochemicals and Lube Integration Project (LuPech), which is aimed at taking the refinery’s capacity from 13.7 mtpa to 18 mtpa while integrating refining with lube oil base stocks and petrochemicals.
“The expansion started five years ago. This being a brownfield expansion, most of projects are being executed within the operating units. Last year the two major revamps that were envisaged in the expansions were executed and commissioned successfully. This year we have commissioned the first two grassroot units of the expansion including Vacuum Distallation Unit and a Lube Oil Base Stocks (LOBS) unit. In the near future, we will be starting the balance block. The last in the line will be the propylene unit which is expected to be commissioned by the end of this financial year,” Biswas said.
The polypropylene unit, with a capacity of 5 lakh tonnes a year, is estimated to cost around ₹1,000 crore and will use propylene generated from soft gases, a by-product of Indian Oil’s in-house INDMAX technology.
INDMAX, developed by Indian Oil’s R&D division, is designed to maximise propylene production from a fluid catalytic cracking unit.
While a conventional FCC typically produces 8-10 per cent propylene, the INDMAX process can raise the yield to as much as 18 per cent, Biswas said.
The technology has already been deployed at Indian Oil’s Guwahati and Paradip refineries and is also being incorporated into the expansions at Panipat and Barauni.
The polypropylene addition comes at a time when India continues to import significant quantities of the polymer despite having substantial installed capacity.
Biswas said per-capita plastic consumption in India remains around one-third of the global average, leaving room for demand growth.
“India has a deficit in polypropylene despite all the installed capacity. The market is growing and there is a lot of potential,” he said. Indian Oil also plans to work with downstream manufacturers in Gujarat to identify products and grades that can be produced at the refinery, leveraging the state’s established downstream industry.
While the refinery’s downstream configuration is being expanded, its crude sourcing has also become increasingly diversified.
Around 70 per cent of the refinery’s crude is imported, with the remaining 30 per cent coming from domestic sources, Biswas said.
The refinery processes domestic crude from northern and southern Gujarat, including both low- and high-sulphur grades, while imported supplies come primarily from Russia and West Asia.
“We are gradually diversifying. We have taken some cargoes from the US in the past. Our portfolio remains very diverse. We have also got a couple of cargoes from Venezuela about three months ago,” Biswas said. “Geopolitically, the situation is very dynamic and we get crude from various sources,” he said.
The broader transformation comes as Gujarat Refinery marks its diamond jubilee year. Commissioned in 1965 with an initial capacity of 2 mtpa, the refinery reached 13.7 mtpa by 2001 and is now being expanded to 18 mtpa.
Biswas said the pace of capacity expansion has historically been dictated by market demand rather than simply the availability of refining technology.
“We cannot expand without being able to push our products. We started with 2 mtpa and are reaching 18 mtpa today. So every time the market has to grow, the demand has to rise and then correspondingly we will catch up,” he added.
Published on September 30, 2026
