Indian Oil’s Gujarat Refinery at Koyali, on the outskirts of Vadodara, expects to run at its expanded crude-processing capacity of 18 million tonnes a year by March 2027, up from 13.7 million tonnes. Refinery head Biplob Biswas, an executive director at the company, said the plant will reach that figure once its remaining secondary-processing units are commissioned this fiscal year, DeshGujarat reported. Reuters carried the same FY27-end target on September 30, citing an IOC executive.
What is being built
The capacity jump forms one part of the larger Petrochemicals and Lube Integration Project, known inside the company as LuPech, which carries a price tag of Rs 17,825 crore. A separate polypropylene unit adds about Rs 1,000 crore. According to DeshGujarat, the refinery finished two major revamps last year and commissioned two greenfield units this year, leaving the plant running somewhere between its old and new capacity today.
Trade journal Hydrocarbon Processing lists the main pieces:
- a 500,000-tonne-a-year polypropylene plant, due by the end of FY27;
- a 2.75 million-tonne INDMAX unit, designed to squeeze more propylene out of each barrel;
- a 270,000-tonne lube oil base stock unit.
Why a refinery is turning toward plastics
Koyali opened in the 1960s as a fuel refinery, built to turn crude into petrol, diesel and kerosene. The LuPech plan redirects some streams that would otherwise end up as fuel into polypropylene and lubricant base oils, which fetch better margins.
Indian Oil’s own reasoning, as reported by Hydrocarbon Processing, is that Indian fuel demand could plateau over the next decade, while consumption of plastics per person in India remains low by global standards. The company expects India to keep importing polypropylene even after Koyali’s unit starts up.
What it means for Vadodara and Gujarat
Vadodara’s industrial identity grew around Koyali, the neighbouring GSFC complex and the former IPCL plant, and the city’s chemical and plastics processors sit close by. A large polypropylene source on their doorstep gives moulders, film makers and packaging firms in the Vadodara-Ankleshwar belt another nearby supplier of resin. Whether local buyers get a price advantage will depend on how Indian Oil markets the output.
For the state, the expansion adds to an already heavy refining footprint. Reliance’s Jamnagar complex and Nayara’s Vadinar refinery already make Gujarat the country’s largest refining hub; a bigger Koyali reinforces that position in central Gujarat, away from the coast.
New process units also mean new emission points next to a city of about two million people. The consent conditions the Gujarat Pollution Control Board attaches to them will be worth reading when they become public.
What to watch
The FY27 deadline leaves about six months on a project that has been under way for roughly five years. The key signals will be the commissioning of the INDMAX and polypropylene units and the refinery’s throughput figures in the company’s quarterly results. Hydrocarbon Processing also reports that the refinery is building hydrogen capabilities, including a dispensing facility and hydrogen bus trials with Tata Motors, which could give Vadodara an early look at hydrogen-fuelled public transport.
Sources: DeshGujarat, Hydrocarbon Processing, Reuters via MarketScreener
This report was compiled and written with AI assistance from publicly reported sources, and reviewed for accuracy.