INTERVIEW: India’s resilient economy to fuel oil demand over next two decades: HPCL

India's oil demand growth is expected to remain strong over the next couple of decades, fueled by robust consumption of oil products such as gasoline and LPG, and sustained by resilient economic growth, according to Vikas Kaushal, chairman and managing director of state-run Hindustan Petroleum Corp.

"I expect overall demand to remain strong for the rest of this year and next year as oil demand is related to core economic activity, and economic growth is showing a lot of resilience," Kaushal told Platts, part of S&P Global Energy, on the sidelines of the annual Abu Dhabi International Petroleum Exhibition and Conference, or ADIPEC 2025, on Nov. 5.

India's refined oil products demand is projected to increase by 78,000 b/d year over year in 2025, with growth in 2026 expected to reach nearly 218,000 b/d, bringing total demand to about 5.65 million b/d, according to S&P Global Energy.

"Diesel demand growth had been somewhat muted due to seasonal factors, but we are positive about the overall outlook," Kaushal said.

S&P Global Market Intelligence forecasts India's real gross domestic product to expand by 6.3% in fiscal year 2025-26 (April-March), driven by strong consumption, rationalization of goods and services tax rates and moderating inflation, despite global policy uncertainty. It projects India's real GDP growth of 6.2% in FY 2026-27.

Kaushal said HPCL's strategy over the next 5 to 10 years and beyond is closely aligned with India's growth targets, as the nation progresses toward becoming a $5 trillion economy and ultimately achieving developed nation status by 2047.

"Over the next decade, we see our role not just as a supplier of energy but as a key enabler of India's economic and social transformation," Kaushal said. "Our vision at HPCL is to be a trusted, future-ready integrated energy company that supports India's growth story, while enabling its decarbonization and transition pathways."

HPCL's broad vision rests on three pillars: ensuring energy security and access; readiness for the energy transition and a focus on sustainability; and emphasis on innovation, technology and digital leadership, according to Kaushal.

Refinery expansion

HPCL's two refineries at Mumbai and Visakhapatnam processed a record 6.57 million mt in the July-September quarter, up 4.3% year over year, the company said in a regulatory filing Oct. 29. Total imported crude volumes were 5 million mt, or 396,739 b/d, during the second quarter of the financial year.

Kaushal said HPCL's overall refining capacity -- including joint venture refineries -- is set to rise to 45 million mt/year from the current 36 million mt/year, following the completion of the HPCL Rajasthan Refinery Ltd. project.

The complex is jointly built by HPCL and the Rajasthan government, with equity stakes of 74% and 26%, respectively.

"We are on track to complete the project and aiming for crude cut-in over the next few months," Kaushal said.

HPCL is transitioning to a crude sourcing model that optimizes both term and spot contracts, as upgrades and expansions in refinery technology enable the processing of a broader range of feedstocks, allowing the company to capitalize on abundant market supplies, he said.

"Every time we go to the crude oil market, we see there is an adequate supply," Kaushal said. "We are having a lot of interactions with oil suppliers here at ADIPEC. The question is about finding the right price and the right grade -- heavy or light -- depending on the need for our oil products output."

"In the long run, crude supplies will depend on how much upstream investments are taking place, but in the short run, there is enough supply."

Energy transition focus

Kaushal said India's energy transition represents both a national imperative and a significant opportunity, and HPCL is dedicated to leading this transformation.

While ensuring the availability of affordable energy to support India's rapid growth, he said HPCL is actively reshaping its portfolio to focus on cleaner, more sustainable fuels and low-carbon pathways.

"HPCL will be a pragmatic transition enabler -- and have a two-fold approach. That is, lowering our own footprint to reduce emission intensity, while enabling customers in transition," Kaushal said.

"We are executing a clear plan to net zero (scope 1 and scope 2) by 2040, with a finalized road map guiding investments in efficiency, renewables, green hydrogen, biofuels, and carbon capture and storage/carbon capture and utilization for hard-to-abate emissions."

HPCL aims to reduce energy intensity and emissions at its refineries by enhancing efficiency, switching to alternative fuels, adopting renewables, utilizing low-carbon hydrogen, and minimizing flaring -- initiatives that are anchored in its ambition to achieve net-zero emissions by 2040, Kaushal said.

"Both our refineries are equipped with grid connections, enabling us to use renewable power. On the marketing front, a total of over 22,000 outlets, representing 94% of our retail footprint, have been equipped with solar power," he said.