IndianOil lifts LPG output 30% as Hormuz disruption pressures India’s fuel supply
IndianOil has increased LPG production by nearly 30% and run refineries above nameplate capacity to protect fuel availability amid Strait of Hormuz-linked disruption. The company is also targeting an expansion of group refining capacity to about 98 million tonnes a year.
What happened
Indian Oil Corporation (IndianOil/IOC) · IndianOil raised LPG output nearly 30% and ran refineries above capacity to maintain fuel availability amid Strait of
Key facts
- LPG production increased nearly 30%
- India imports more than 88% of crude oil needs
- Around 45% of crude imports are linked to the Strait of Hormuz
- Nearly 90% of LPG imports are linked to the Strait of Hormuz
- FY ended March 2026 standalone net profit: Rs 36,802 crore
- Turnover: about Rs 8.86 lakh crore
- Aggregate sales exceeded 105 million tonnes
- Refineries processed 75.45 million tonnes of crude
- Liquid pipeline throughput: 102.52 million tonnes
- Domestic petroleum-product sales: 88.97 million tonnes
- Q1 crude processing: 19.17 million tonnes
- Q1 capacity utilisation: 109.4%
- Q1 pipeline throughput: 28.55 million tonnes
- Domestic petroleum-products market share: 43.1%
- Group refining capacity to rise from 80.75 million tonnes/year to around 98 million tonnes/year
- India refining-capacity target: 300 million tonnes/year
- Petrochemical intensity target: around 15% by 2030
- Natural-gas sales target: 1.5x by 2030
- Upstream integration target: over 10% by 2031
- Terra Clean renewable capacity under development: 1 GW
- Additional renewable capacity under preparation: 4.3 GW
Why this matters
IndianOil’s planned expansion toward 98 million tonnes of refining capacity strengthens the case for supply-chain partnerships, storage assets and domestic fuel-infrastructure investments.
What to watch
- Duration and severity of any Strait of Hormuz shipping restriction, including vessel queues, diversions and tanker availability.
- India's crude and LPG import arrival data, port discharge delays, and refinery crude-inventory days.
- Brent crude, Asian LPG benchmarks, tanker freight rates and war-risk insurance premiums.
- IndianOil, BPCL and HPCL marketing margins, inventory disclosures, and announcements on retail fuel or domestic LPG pricing.
- Reports of LPG bottling-plant delays, regional stock-outs, dealer allocation cuts, or emergency product transfers.
- Government decisions on strategic reserve releases, fuel-tax changes, marketer compensation, export restrictions or demand-control measures.
- State oil marketers increase crude-source diversification toward non-Hormuz suppliers and seek term cargoes with alternative routing options.
- IndianOil maintains above-nameplate refinery runs, maximizes LPG recovery, and shifts product balances among refineries, bottling plants and high-consumption markets.
- Oil marketing companies build inventories of LPG, petrol, diesel and aviation fuel near major consumption centers and accelerate inter-company product swaps.
- The government may coordinate strategic petroleum reserve drawdowns, shipping/insurance support, and fiscal relief if marketer under-recoveries widen.
- Fuel retailers tighten allocation planning for commercial, aviation and fleet customers before affecting household LPG or core retail networks.