State-owned IOC, Bharat Petroleum Corp Ltd (BPCL) and Hindustan Petroleum Corp Ltd (HPCL) together with Saudi Aramco and Adnoc plan to set up a 60 million tonnes refinery-cum-petrochemical complex on Maharashtra coast.
Land acquisition has led to delay in the project, but once the issue is sorted out, the project is going to come up with investments from Aramco and Adnoc, he said.
"We are certain and confident that the country needs this refinery to come up because of the growth the country is going to see in fuel demand in the future," Vaidya added.
Once the land issue is sorted out, both companies are committed to investing in the project, he said.
Aramco and Adnoc are to hold 50 per cent in the project, while IOC has a 25 per cent stake. The remaining 25 per cent is split equally between BPCL and HPCL.
India currently has an oil refining capacity of about 250 million tonnes per annum (about 5 million barrels per day). Fuel demand is expected to double to 10 million bpd by 2050 and refining capacity would need to be augmented to meet that else the country would have to import petrol, diesel and ATF.
Aramco and Adnoc see themselves as principal oil suppliers to the west coast refinery. In fact, talks of Aramco picking up a 20 per cent stake in Reliance's O2C business were conditioned on it supplying 5,00,000 barrels of oil per day (bpd).
Vaidya said India witnessed unprecedented demand destruction after a nationwide lockdown was imposed to prevent the spread of coronavirus.
Oil demand fell by as much as 49 per cent in April but with the reopening of the economy the demand is coming up, he said.
"September showed recovery faster than expected," he said, adding while petrol demand was back to pre-COVID levels, diesel was 4 per cent less than normal.
Demand for petrol has been more resilient than diesel due to an increased preference for using personal vehicles instead of public transport to follow distancing norms. Pent-up demand and the upcoming festival season may support fuel sales.
But aviation turbine fuel (ATF) sales continue to be way below normal as airlines are yet to resume full operations.
"We see (oil) demand picking up this quarter and by the end of the current financial year (March 2021), we should be back to pre-COVID levels," he said.
Speaking at the same session, oil cartel OPEC Secretary-General Mohammad S Barkindo said global oil demand recovery is not picking pace at rates earlier expected. "Demand is looking anaemic."
A COVID-19 vaccine and economies returning to normal holds key to oil demand recovery in 2021, he said. "We can remain optimistic that the worst is behind us."
"Recovery will take longer than the shock. The shock was abrupt," he said, referring to the plunge in oil prices in April on demand destruction.
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
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