CPCL to Lift Manali Refinery Throughput to 280,000 Bpd as Indian Refining Investment Surges
CPCL's Manali expansion joins a wave of Indian refining investment that the IEA says will add 15% to national capacity by 2030.
Chennai Petroleum Corporation Limited disclosed plans on Monday (2026-08-03) to expand crude processing at its Manali refinery by roughly a third, targeting 280,000 barrels per day, according to the company's 2025/2026 annual report. The move places CPCL alongside the broader Indian refining buildout that the International Energy Agency says has been running at full tilt for years.6
The IEA put India on course for a 15% increase in national refining capacity by 2030, driven by a 23% jump in oil refining investment over the past five years — itself part of an 11% annual average rise in India's total energy investment across that period. India's refiners have been adding throughput into a market where crude supply is ample and utilisation rates are high. What is less settled is whether domestic fuel demand will grow fast enough to absorb the extra capacity being built.6
Manali is not CPCL's only strategic move. The company's Cauvery site will be reoriented as a petrochemicals hub, with parent Indian Oil Corporation — which holds a 75% stake in CPCL — driving that separation of fuels and chemicals within the IOC group. The capex schedule and timeline for reaching the 280,000-bpd target have not been disclosed.6
India's refiners have had little difficulty sourcing crude. Overall imports rose to 5.27 million barrels per day in May (2026-05), up 15.4% from April (2026-04), according to industry data cited by Reuters. Russia remained the dominant supplier at roughly 1.92 million bpd — up around a fifth from April — and accounted for 36.5% of total imports.4
A new dynamic shifted in May (2026-05). The UAE became India's second-largest crude supplier, with imports rising nearly 41% to 942,500 bpd in the first full month after the Gulf producer left OPEC, boosting supplies out of Fujairah. Indian refiners diversified partly in response to Strait of Hormuz uncertainty following the Iran war.4
That uncertainty may soon ease. Industry sources told Reuters that refiners are preparing to scale back spot purchases from Latin America if Hormuz reopens following an interim agreement with Iran. Middle Eastern producers have already asked buyers to lift full contracted monthly volumes once flows through the waterway resume. Some refiners are also weighing Iranian barrels if sanctions are lifted and banking channels reopen. A return to normal Hormuz flows would reduce the spot premium India has been paying for long-haul and alternative cargoes and put Russian volumes in closer competition with Gulf barrels.4
The sector's recent economics have been strong. Bharat Petroleum's consolidated profit after tax nearly doubled to INR25,843 crore in the financial year ended 31 March 2026 (FY26), up 93.78% against INR13,337 crore in FY25. BPCL ran its refinery complex at 117% utilisation, processing 41.15 million metric tonnes, with consolidated EBITDA up 57.08% to INR45,601 crore. ICE Brent crude front-month traded at $83.06 a barrel on Monday (2026-08-03).1
But analysts are less sanguine about the demand side. Kpler and Rystad Energy slashed their 2026 gasoline and diesel demand growth estimates for India by between 30% and 90%, according to figures cited by Bloomberg in the week of 2026-06-01. India's refined product exports also fell sharply in May (2026-05) to their lowest level since October 2022, as maintenance outages curtailed available volumes and domestic absorption took priority.3,2
ONGC separately won board approval to expand India's strategic crude reserves, framing the decision as a post-Iran-war resilience measure — reinforcing the government's focus on supply security at a time when volumes through critical waterways remain in flux.5
A refinery expansion of Manali's scale takes years to execute and carries sustained exposure to construction costs, regulatory timelines and the demand trajectory that Kpler and Rystad are now questioning. If Indian fuel demand growth disappoints in 2026 and 2027, the utilisation rates that made BPCL's FY26 results look spectacular become harder to sustain industry-wide — and the case for bringing additional capacity online at Manali gets tested against a market that may not need it on schedule.6,31