India's petroleum product exports are set to increase by around 25% from the FY25 level of $44.4 billion, according to a report by Business-Today. India, one of the world's largest exporters of refined petroleum products, will see the boost as new refining capacity becomes operational by December 2026 through Indian Oil Corporation's (IOCL) largest expansion programme to date.
IOCL's Capacity Expansion Programme
The state-owned refiner IOCL is raising its total refining capability from the current 80.75 million metric tonnes per annum (MMTPA) to a record 98.05 MMTPA, Business-Today reported. The company has already spent more than Rs 53,500 crore under the Rs 75,000 crore expansion programme. The project spans IOCL's refineries at Panipat, Vadodara, and Barauni. All three expansion projects are slated to be commissioned during November–December 2026.
| Refinery | Current Capacity (MMTPA) | Expanded Capacity (MMTPA) |
|---|---|---|
| Panipat | 15 | 25 |
| Vadodara | 13.7 | 18 |
| Barauni | 6 | 9 |
“Whatever surplus capacity we have after meeting domestic needs, we will look to export. This has the potential to raise our export share to about 15% of total revenues, from 5% currently. That said, we don’t work with a fixed export target, and our priority remains domestic first,” a senior official at IOCL told ET.
India's Refining Landscape and Export Dynamics
Although India imports around 90% of its crude oil requirement, it has become one of the world's largest exporters of refined petroleum products by using its large and sophisticated refineries, Business-Today noted. At present, India's refining industry has an installed capacity of around 258.1 MMTPA, compared with domestic petroleum product consumption of approximately 239 MMTPA. In practice, refineries generally operate at 105–115% of installed capacity, resulting in actual annual production of close to 300 million tonnes. Of this, roughly 61.5 million tonnes represents surplus output that is shipped overseas.
Reliance Industries accounts for nearly 70% of the country's refined fuel exports through its 70 MMTPA Jamnagar refinery, the world's largest refining complex at a single location.
Outlook and Key Drivers
By the end of 2026, IOCL is expected to add another 17.3 MMTPA of refining capacity. After meeting domestic requirements, a substantial portion of the additional production is likely to be available for export. Should the incremental output be sold overseas, it could provide a significant boost to India's petroleum product exports, further reinforcing the country's standing as a global refining hub while increasing foreign exchange earnings, Business-Today reported.
The latest capacity expansion also comes at a time when additions to global refining capacity remain limited, while supply disruptions in Russia and the Middle East continue to support refining margins, according to the source. However, the IOCL senior official cautioned, “if the demand rises significantly in India, then we may not have a major exportable surplus on a sustained basis from our refining systems.”
For commodity traders and analysts, these developments signal a structural shift in global refined product flows. The additional Indian volumes, particularly from IOCL's new capacity, could ease tightness in middle-distillate markets, especially if geopolitical disruptions persist. Conversely, any unexpected surge in domestic Indian demand would quickly absorb the surplus, tightening global supply again. Key dates to watch include the November–December 2026 commissioning window for the three refinery expansions.
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