Indian Oil sets Rs 31,000-cr capex for FY25 to expand business, achieve net-zero status

Indian Oil’s board approved the implementation of 1 GW installed capacity of renewal energy projects.

State-run Indian Oil Corporation Limited (IOCL) plans a capital expenditure of Rs 31,000 crore, including equity investment in joint ventures and subsidiaries, for the financial year 2024-25, the company told Moneycontrol.

The oil marketing giant spent Rs 38,660 crore in FY24, widely surpassing its planned capex of Rs 30,395 crore for the fiscal. The higher spending by IOCL in the previous year comes as the company spends on both its core businesses and green energy projects as it aims at net-zero emissions by 2046.

On April 30, the Indian Oil board approved the implementation of 1 GW installed capacity of renewal energy projects, comprising standalone ground-mounted solar or standalone onshore wind or wind-solar hybrid projects. This would be done through the company’s wholly owned subsidiary at an estimated cost of Rs 5,215 crore, including taxes and duties in a phased manner, the company said.

Indian Oil had proposed the new subsidiary under low-carbon, clean and green energy business to meet its operational requirements for the net-zero target.

The state-run oil marketing company reported a consolidated net profit of Rs 5,487.92 crore for the fourth quarter of FY24, a decline of 49 percent from Rs 10,841.23 crore reported last year, largely because of inventory losses as compared to gains in the previous three months, the company said in a communication to Moneycontrol on May 3.

Also read: State-run OMCs combined profits tumbled in Q4 amid weak GRMs and elevated crude prices

Other OMCs such as Bharat Petroleum Corporation Limited (BPCL) and Hindustan Petroleum Corporation Limited have planned capex of Rs 16,000 crore and Rs 18,000 crore for FY25.

BPCL and HPCL also spent higher than their planned capex in FY24. In the previous year, BPCL spent Rs 11,002 crore, while HPCL capex expanded to Rs 13,842 crore, according to oil ministry data.

The three state-owned OMCs are advancing towards their ambitious net-zero goals and are spending on both expansions of their core businesses as well as on green energy projects.

Also read: BPCL expects Russian crude to play ‘significant role’ in current year; procured 39% oil from Moscow in FY24