The total investment for expansion and upgradation is around Rs 25,000 crore, says Surana.
Electric vehicles may replace a little bit of the additional demand but oil is going to continue. Also, it is yet to be seen how comfortable people are having to stop every 200 kms to charge the vehicles, MK Surana, CMD, HPCL, tells ET Now.
How are your expansion and update plans spanning out?
As you are aware that India is supposed to roll out BS-VI from the 1st of April 2020 except for in the NCT region, which has already been rolled out. All the refineries are preparing for it, HPCL is also upgrading both of its refineries. Our upgradation comes with expansion of the refineries so that we will be ready in time to rollout all over the country. The projects are on course and we will be ready.
Is there any specific investment that you are looking at for this?
The total investment for expansion and upgradation is around Rs 25,000 crore. But for BS-VI upgradation, it will cost around Rs 5,000 crore for both the refineries put together.
We are witnessing a big boost to electric vehicles? Do you see EVs as the new market disruptors?
There is a lot of talk on the electric vehicles but in a country like India, it is still distant because right now the penetration level is very low. The total percentage of electric vehicles is miniscule.
Electric vehicles require a lot of adaptability, the convenience, the infrastructure, the charging stations, the cost and the peoples’ convenience. In India we do not throw out vehicles, we transfer vehicles.
Second, how comfortable will he people be about having to stop every 200 kms and charging the vehicle There has to be a place to charge it, a place to park. There are issues about that. It may replace a little bit of the additional demand but oil is going to continue because the total incremental demand of oil in the country is much higher than what can be replaced by others. It is still 10-15 years away from us.
The government has been talking about the ethanol blended program and about mandatorily blending ethanol with petrol and diesel. But we are far from achieving the targets.
Actually we are doing quite well. In fact, this year, it is almost 6%. All over India, ethanol blending will happen and in some states it has almost reached 10% also. We are doing well. The country needs more but the ethanol availability is an issue and for that, the government has taken various policy measures in terms of allowing production of ethanol from molasses, B heavy molasses, sugar cane juice and even the advanced fuels.
The government has taken policy decisions but the only constraint is the availability of ethanol. Otherwise we are ready to blend up to 10%.
How confident are you of getting an extension from US with regard to Iran sanctions?
We will see. These are the diplomatic issues and let the diplomatic people handle it.