Indian Oil’s Gujarat Refinery Expansion Targets 18 MMTPA by FY27-End
₹18,936-crore LuPech project to boost petrochemical production, with 5-lakh-tonne polypropylene plant planned
Indian Oil Corporation Limited’s (IOCL) Gujarat Refinery expansion is entering a crucial execution phase, with sustained operations at the expanded capacity of 18 million metric tonnes per annum (MMTPA) targeted by the end of FY2026–27.
The ₹18,936-crore Lube-Petrochemical Integration Project (LuPech) will increase the refinery’s crude-processing capacity from 13.7 MMTPA to 18 MMTPA, equivalent to approximately 360,000 barrels per day.
Gujarat Refinery Executive Director and Refinery Head Biplob Biswas indicated on September 30 that sustained operations at the expanded capacity are expected by the end of FY2026–27. While primary crude-processing capacity can be increased, full-scale operations depend on commissioning the associated downstream facilities.
Polypropylene plant to add 5 lakh tonnes
A major component of LuPech is a polypropylene plant with an annual capacity of 500,000 tonnes. The facility is expected to begin production by the end of FY2026–27, using propylene produced through Indian Oil’s INDMAX technology.
Polypropylene is widely used in packaging, automotive components, textiles, consumer goods and industrial applications. The plant will enable Indian Oil to convert refinery streams into higher-value petrochemical products and help meet domestic demand.
India imports polypropylene despite having an established domestic manufacturing base. The additional capacity is expected to support import substitution, although it will not eliminate the need for imports.
Lube-base-stock production adds value
The project also includes a Lube Oil Base Stock (LOBS) facility with a reported capacity of approximately 270,000 tonnes per annum. Base stocks are essential raw materials for manufacturing automotive and industrial lubricants.
Together, the polypropylene and LOBS facilities will broaden the refinery’s product portfolio beyond conventional transportation fuels.
Commissioning remains the key test
Indian Oil’s investor presentation for the third quarter of FY2025–26 listed the project’s approved cost at ₹18,936 crore, with physical progress of 85.8% as of December 31, 2025, and an expected commissioning date of November 2026.
The latest reported timeline for sustained operations at 18 MMTPA extends to the end of FY2026–27. These milestones are not necessarily contradictory: commissioning individual facilities and achieving stable, integrated operations across the refinery are different stages.
The final assessment will depend on the commissioning of interconnected units, operating rates, product yields and the commercial performance of the additional output.
LuPech marks a significant shift in Gujarat Refinery’s strategy towards integrated refining and petrochemical production. The larger challenge for Indian Oil will be to translate its expanded capacity into sustained production of higher-value fuels, lubricants and petrochemicals.
