Mumbai, Oct. 30 -- India's expanding refining capacity is poised to lift diesel exports in 2027, easing shortages in global markets disrupted by geopolitical conflicts. State-owned refiners are due to add at least 15 mn t of annual diesel-making capacity through a new refinery and expansions at existing plants, Oil Minister Hardeep Singh Puri said at an industry conference in Goa.

The Middle East and Russia-Ukraine wars have disrupted crude and fuel flows, tightening supplies and pushing prices higher. Diesel availability has been particularly constrained since Russia halted exports in July to protect domestic supplies after attacks on its refineries and ports. The squeeze drove US diesel prices to a record and led Washington to consider export restrictions before an agreement between Donald Trump and Vladimir Putin to release more fuel.

India, already one of the world's largest diesel suppliers, overtook Russia this year to become the second-largest exporter, according to Kpler data. The fuel is widely used by farms, factories and heavy transport. Goldman Sachs Group expects supplies to remain tight through 2027, creating an opportunity for Indian refiners to increase their share of international markets.

Indian Oil, the country's largest refiner, expects to produce up to 9 mn t more diesel a year from 2027 after expansions add more than 17 mn t of crude-processing capacity across three refineries, Chairman Arvinder Singh Sahney said. Hindustan Petroleum will add about 4 mn t of diesel output as its 9 mn t-a-year Rajasthan refinery reaches full capacity, while Numaligarh Refinery will raise production to about 3 mn t. Bharat Petroleum expects to add 1.5 mn t from 2028.

In the first half of the financial year that began in April, Indian refiners produced 59 mn t of diesel, compared with domestic consumption of about 46 mn t, oil ministry data showed. National refining capacity is projected to rise to 300 mn t a year from about 267 mn t currently, and eventually reach 400 mn t, Puri said. The additional output could strengthen India's role in meeting international diesel demand.

Published by HT Digital Content Services with permission from Construction World.