State oil cos power up capex machine

Indian Oil Corporation, Hindustan Petroleum Corporation and GAIL have accelerated their capital spending, with each of them exceeding their annual capex target in just ten months. The combined capex of these three state-run oil companies during the April 2023-January 2024 period amounted to ₹51,000 crore, according to the petroleum and natural gas ministry data.

All state-run oil companies together spent ₹1,03,000 crore in this period against the target of ₹1,06,000 crore for this financial year.

Indian Oil Corporation, the nation's top refiner and fossil fuel retailer, has been the biggest spender among all state oil companies in this fiscal. It spent ₹32,300 crore in the April-January period against its full-year target of ₹30,400 crore. The company is expanding its refining capacity and adding petrochemical facilities, fuel stations, natural gas supply infrastructure and biofuel production units.

Hindustan Petroleum Corporation, which is building a greenfield refinery in Barmer in Rajasthan, also overshot its capex target of ₹10,200 crore for 2023-24, having spent ₹10,500 crore in the April-January period. The Barmer project has been a key cash guzzler for the company, which is also investing in its natural gas, biofuel and fossil fuel retail business.

GAIL, the nation's top transporter and marketer of natural gas, spent ₹8,400 crore until January in this fiscal, overshooting its full-year target of ₹7,750 crore. It has been spending money on expanding its petrochemical production facility, pipelines and gas marketing network.

Oil and Natural Gas Corporation, the country's top domestic producer of oil and gas, spent ₹27,000 crore until January in this fiscal against the planned expenditure of ₹30,000 crore for the year. Bharat Petroleum Corporation has used up ₹8,500 crore against the annual allocation of ₹10,000 crore.