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State oil companies are investing in petrochemical; despite facing oversupply
Industry News- Aug 12,24
The aim is to boost the production of essential chemicals used in plastics, paints, and other industrial applications, which have historically been imported from countries like China.
Indian state-run oil companies are investing heavily in expanding their petrochemical capacities despite facing oversupply and weak margins in the sector. This strategic shift is driven by a focus on increasing the production of value-added chemicals derived from crude oil, while scaling back on fuel production as global demand for cleaner energy grows.
At the heart of this transformation is the Petrochemical Intensity Index (PII), a metric gaining attention in the boardrooms of Indian refiners and the oil ministry. The aim is to boost the production of essential chemicals used in plastics, paints, and other industrial applications, which have historically been imported from countries like China. Currently, India relies on imports for 19% of its petrochemical needs, and up to 30% of certain chemical products.
By investing in petrochemical infrastructure, state-run oil companies are positioning themselves to meet domestic demand more effectively and reduce dependency on international suppliers. This move aligns with broader energy transition goals and economic strategies to foster self-reliance in the sector.
(Business Standard)
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