Fueling growth: State-run oil companies pump ₹89,000 crore into capital spending

In a groundbreaking move to fortify India's energy infrastructure, state-run oil companies have injected a formidable ₹89,000 crore into capital spending during the initial nine months of the current fiscal year, seizing a leading position in national cumulative capital expenditure (capex) targets. This strategic investment marks a significant leap towards augmenting production and distribution capabilities within the oil sector, showcasing a proactive approach to fostering growth.

Overseeing these strategic investments, the Oil Ministry reports that the capital spending by public sector oil refineries stands at an impressive 84% of their combined capex target of ₹106,000 crore for the fiscal year. This data underscores the sector's trajectory to exceed its annual investment goals, reflecting a steadfast commitment to growth and development, outpacing many other large public sector undertakings (PSUs) under different central government ministries.

Indian Oil Corporation (IOC), the nation's leading refiner and fossil fuel retailer, emerges as the frontrunner among state oil companies, spearheading this year's capital spending surge. Allocating ₹27,000 crores, IOC has achieved nearly 90% of its annual target, demonstrating a resolute commitment to expanding refining capacity and reinforcing marketing infrastructure and petrochemical facilities.

Oil and Natural Gas Corporation (ONGC), India's largest producer of oil and gas, has directed ₹24,500 crore towards capital spending, representing approximately 80% of its annual target. Meanwhile, ONGC Videsh, the overseas arm of ONGC, has contributed ₹2,400 crore, achieving three-fourths of its annual budget.

Hindustan Petroleum Corporation (HPCL) has utilised ₹9,500 crore, nearly depleting its annual budget of ₹10,000 crore. This significant spending is dedicated to the construction of a greenfield refinery in Barmer, Rajasthan, showcasing a forward-looking approach to infrastructure development.

Bharat Petroleum Corporation (BPCL) has exhibited robust financial commitment, exhausting 80% of its annual budget of ₹10,000 crore. Likewise, GAIL India, the largest natural gas transporter and marketer, has invested ₹6,400 crore, reaching 80% of its annual target. Oil India, in alignment with its counterparts, has utilised 80% of its annual budget of ₹5,000 crore.

The cumulative capital spending by state-run oil companies surpasses ₹100,000 crore annually. Of the ₹106,000 crore earmarked for the current fiscal year, 45% is expected to be allocated to exploration and production activities. Additionally, approximately ₹7,000 crore is being invested in expanding petrochemical facilities, while the remaining funds are dedicated to refining and marketing business initiatives.

Notably, public sector oil and gas companies have already achieved over three-fourths of their cumulative capex target for the current financial year, setting the pace for national capex achievements. Capex, crucial for long-term asset enhancement, is indicative of the sector's commitment to swiftly expanding capacities in exploration and production, refining and petrochemicals, fuel retail, and gas infrastructure, in anticipation of the country's surging energy demand in the coming years. This proactive approach further solidifies the industry's role in propelling India towards a resilient and self-sufficient energy future.