State-run Indian Oil Corporation (IOC) is planning to set up a new POL (Petroleum, Oils and Lubricants) terminal in Andaman and Nicobar Islands, at a time when the fuel demand in the region is seen as rising, with an aim to operationalise the facility in five years.
The oil marketing company (OMC) is currently in the process of acquiring land for the proposed POL terminal, and expects the operationalisation in the next five years, Rakesh Kumar, chief terminal manager at Indian Oil said.
The capacity of the new terminal is yet to be finalised.
“The storage capacity needs to be increased in Andaman & Nicobar and we are currently looking for land (for the new POL terminal). The capacity will depend on fuel demand projections,” said Kumar.
POL terminals are storage facilities set up by oil marketing companies for distribution of refined products in an area. Currently, Indian Oil has one POL terminal with a capacity of 27,847 KL and is solely responsible for meeting the fuel demand of the island. Other state-run OMCs including Bharat Petroleum (BPCL) and Hindustan Petroleum (HPCL) do not have operations in the area.
Diesel, petrol, LSHF HSD (low sulphur high flash high speed diesel - a grade of diesel used by Indian Navy ships, aviation turbine fuel (ATF) and liquefied petroleum gas (LPG) are the five petroleum products consumed in the island. In Andaman & Nicobar, IOC receives refined products at the POL terminal from its Paradip and Haldia refineries, while LPG is imported from the Middle Eastern countries at the company’s LPG bottling plant.
The fuel consumption in Andaman and Nicobar has been rising over the last five years and is expected to grow further.
Diesel is the most-consumed petroleum product on the island, used for generating electricity in the region, and saw a year-on-year demand growth of 1.41 percent in 2024-25, with consumption rising to 1.43 lakh KL in the fiscal. Andaman & Nicobar’s electricity accounts for approximately 70 percent of the terminal’s diesel volumes.
Petrol and LSHF HSD demand grew by 6 percent and 24 percent, respectively, while ATF demand fell by 5.43 percent in FY25 from the previous year.
IOC also operates an LPG bottling plant in the island with a capacity of 15 thousand metric tonnes per annum (TMTPA). LPG consumption grew by 3 percent year-on-year in FY25 at 12,731 metric tonnes (MT), showed Indian Oil data.
Andaman & Nicobar Islands has a total population of 4.34 lakhs, according to a 2019 survey. The union territory has a total 836 islands out of which 31 are inhabited.
(The reporter was at IOC’s POL terminal and LPG bottling plant in Port Blair at the invitation of Ministry of Petroleum and Natural Gas)
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