IOC lifts LPG output 30% as refineries run above capacity amid West Asia disruption
Indian Oil Corporation increased LPG production by nearly 30% and operated refineries above 100% utilisation to protect domestic fuel availability amid Strait of Hormuz-linked supply disruption. It is also targeting nearly 98 mtpa of refining capacity, alongside gas, petrochemical and renewable expansion.
What happened
Indian Oil Corporation (IOC) · IOC lifted LPG output nearly 30% and ran refineries above capacity to protect Indian fuel supplies amid Strait of Hormuz
Key facts
- LPG production increased nearly 30%
- Refineries operated above 100% utilisation
- India imports over 88% of crude requirement
- About 45% of crude imports linked to Strait of Hormuz
- Nearly 90% of LPG imports linked to Strait of Hormuz
- FY26 standalone net profit: ₹36,802 crore
- FY26 turnover: about ₹8.86 trillion
- Aggregate sales: over 105 million tonnes
- FY26 crude processed: 75.45 million tonnes
- FY26 pipeline throughput: 102.52 million tonnes
- FY26 domestic petroleum-product sales: 88.97 million tonnes
- Q1 crude processed: 19.17 million tonnes
- Q1 capacity utilisation: 109.4%
- Q1 pipeline throughput: 28.55 million tonnes
- Domestic petroleum-product market share: 43.1%
- Refining capacity planned to rise from 80.75 million tonnes/year to about 98 million tonnes/year
- India refining-capacity target: 300 million tonnes/year
- IOC expected share of incremental capacity: over 40%
- Petrochemical intensity target: about 15% by 2030
- Natural-gas sales target: 1.5x by 2030
- Upstream integration target: over 10% by 2031
- Terra Clean capacity under development: 1 GW
- Additional renewable capacity under preparation: 4.3 GW
Why this matters
IOC’s integrated expansion across refining, gas, petrochemicals and renewables creates partnership and acquisition opportunities that can reduce import exposure and diversify earnings.
What to watch
- Duration and severity of Strait of Hormuz shipping disruption, including tanker diversions and freight-insurance costs.
- Indian crude import costs, diesel and LPG price decisions, and any expansion of government fuel subsidies.
- IOC refinery utilization sustainability, unplanned maintenance incidents and LPG inventory data.
- Domestic diesel availability and changes in road-transport fuel surcharges.
- Food inflation, last-mile delivery fees and consumer confidence indicators in India.
- Retailers should lock in transport capacity, reassess fuel-surcharge clauses and expand route optimization for high-frequency delivery networks.
- Grocery, quick-commerce and food-service operators should monitor LPG cylinder availability and secure backup supply arrangements for stores, dark kitchens and warehouses.
- Merchants should prepare value-led promotions and smaller pack sizes in discretionary categories if fuel-linked inflation reduces household purchasing power.
- Large retail chains should evaluate distribution-center energy exposure and accelerate solar, battery and alternative-fuel investments where economics improve.