Indian Oil bets on petrochemicals, sets ₹24,000 cr investment in Gujarat

This diversification is part of IOC’s long-term strategy to offset declining fuel demand and increase petrochemicals’ contribution to its product portfolio from under 5% to 15% by 2030. 

The Indian Oil Corporation’s (IOC) Gujarat Refinery at Vadodara is investing ₹24,000 crore to help it diversify into the petrochemicals segment by commissioning two petrochemical units during calendar year 2025.

“The energy landscape is changing very quickly in our country. In order to remain future-ready we are diversifying into petrochemical projects. It is expected that fuel demand will go down in 10-15 years, and to enable IOC to survive we need to diversify into petrochemicals and other sectors,” Biplob Biswas, executive director and refinery head of Gujarat Refinery, said Wednesday.

“Currently, we are manufacturing Linear Alkyl Benzene (LAB). This is the base material used in soaps and detergent. We are also manufacturing Sulphur Bentonite in small quantities. From this year onwards we will start manufacturing Polypropylene and Butyl Acrylate, a base material for the paint industry,” Biswas said about 500 KPTA of polypropylene capacity and 150 KPTA of Butyl Acrylate units being set up near Vadodara. The upgraded LAB unit now has a capacity of 162 KPTA, which has increased from 120 KPTA last year.

By 2030, petrochemicals will constitute 15 per cent of IOC’s product portfolio. Currently, it is less than five per cent. The ₹17,825 crore Petrochemical and Lube Integration ( LuPech) Project aims to produce Polypropylene and Lube Oil Base Stock, raising the refinery’s capacity from 13.7 MMTPA to 18 MMTPA. The project includes critical units like Indmax, Octamax, Propylene Recovery Unit, MS Block – ISOM & NSU, Lube Oil Block, New VDU, and Polypropylene Unit. It is expected to be commissioned by the end of 2025.

The ₹5,894 crore Acrylics/Oxo-Alcohol project, scheduled for completion in 2025, will produce Butyl Acrylate, a key ingredient for paints & coatings, adhesives, and textile chemicals, which will substitute imports, thereby boosting the economy. The project includes setting up the Acrylic Acid (AA) Unit, Normal Butyl Alcohol (NBA) Unit, Syn-Gas Unit, Hydrogen, and Butyl Acrylate (BA) Unit.

Published on April 23, 2025