Indian Oil Corporation (IOC), the nation's top oil firm, has revised the estimates of cost of expanding the Panipat refinery in Haryana by 10 per cent to Rs 36,225 crore and pushed back completion deadline by more than a year to December 2025.

IOC is expanding its 15 million tonnes a year refinery, about 100-km north of New Delhi, to 25 million tonnes.

In a stock exchange filing, the firm said its board has approved "revision in cost of the project for capacity expansion of Panipat Refinery from Rs 32,946 crore to Rs 36,225 crore and revision in completion schedule of the project from September 2024 to December 2025." Besides expanding the capacity to turn crude oil into value-added fuels such as petrol, diesel and ATF, IOC is also setting up a polypropylene unit and a catalytic dewaxing unit.

Polypropylene is used in packaging, plastic parts for various industries including the automotive industry, and textiles. Catalytic dewaxing is used in base oil production.

IOC owns and operates nine of the country’s nearly two-dozen refineries. The total capacity under its operations is 70.1 million tonnes per annum.

In its latest annual report, the firm says, “By 2026, our approved projects will significantly increase our crude oil refining capacity from the current 70.05 million tonnes per annum to 87.9 million tonnes.” In August, the company had awarded a contract to McDermott International Ltd to provide a suite of services for further expansions of olefins and polymers production at Panipat refining and chemical complex.

Designed to improve operational flexibility of the refinery to help meet domestic energy demand, the Panipat capacity expansion project would increase production of petrochemicals and value-added specialty products to elevate margins and derisk IOC's company wide exposure to its conventional fuel business via addition of new units at the integrated olefins and aromatics complex.

IOC's phase-two naphtha cracker unit (NCU) expansion project is expected to increase the ethylene production capacity by around 20 per cent.

Besides, owning 28 per cent of the nation's oil refining capacity, IOC also owns 36,792 out of 88,248 petrol pumps in the country.

IOC said its board has also approved "procurement and installation of 4,000 fast electric vehicle chargers at an estimated capital investment of Rs 919.78 crore." The firm is investing heavily into alternate energy sources, as part of a broader transition the country is making in pivoting away from fossil-fuels. EV charging stations are one of them.

India's domestic demand for chemicals and petrochemicals is slated to nearly triple from current levels by 2040.