Ind-Ra Foresees Notable Expansion in India’s Refinery Capacity

SEATTLE (Oil Monster): India's refinery capacity is expected to increase significantly over the next several years, according to India Ratings and Research (Ind-Ra). Over the next two to three years, it anticipates that the nation's refinery capacity will increase by around 22%. Stable marketing margins and strong petroleum demand will be the primary drivers of the anticipated expansion. It also predicts strong rise in the need for petroleum products.

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Ind-Ra predicts that the oversupply from new refinery capacity worldwide and the continued poor global demand will continue to put pressure on the gross refining margins (GRMs) in FY26. It should be mentioned that the average price of crude oil has significantly decreased, falling from $78.7 per barrel in 2QFY25 to 75.2 per barrel in October and $73.02 per barrel in November 2024.

It is anticipated that the nation's independent petrochemical businesses will post higher EBITDA in FY26. Additionally, upstream oil firms are probably going to keep their profit margins strong. Furthermore, Ind-Ra pointed out that lower domestic gas allocations could result in lower EBITDA margins for city gas distribution companies.

In an earlier forecast, the agency had predicted 6.6% growth to the country’s economy and further easing of monetary conditions in FY26, primarily driven by growing investments.