In the first quarter of the financial year 2024-25, Indian Oil Corporation (IOC) and Oil and Natural Gas Corporation (ONGC) emerged as the leading spenders among state-run oil companies, with capital expenditures of approximately Rs 8,500 crore and Rs 8,000 crore respectively.
This spending accounts for nearly a quarter of their annual capital expenditure budgets. The combined capital expenditure target for state-run oil companies for the fiscal year 2024-25 stands at Rs 1,18,500 crore.
According to data from the petroleum and natural gas ministry, these companies spent a total of Rs 26,500 crore during the April-June quarter, achieving about 22 per cent of their annual target. Indian Oil Corporation and ONGC surpassed the average spending rate, each utilising 27 per cent and 26 per cent of their yearly budgets.
In contrast, other state-run oil firms exhibited slower spending rates. Hindustan Petroleum Corporation (HPCL) spent Rs 2,680 crore, equating to 21 per cent of its annual budget, while Bharat Petroleum Corporation Limited (BPCL) incurred an expenditure of Rs 1,600 crore, representing 12 per cent of its budget. GAIL (India) Limited and Oil India Limited also lagged behind, with expenditures of Rs 1,500 crore and Rs 1,200 crore respectively, accounting for 19 per cent and 18 per cent of their annual budgets.
The capital expenditures reflect the companies’ investments in a range of projects aimed at bolstering their operational capabilities. Refiners such as Indian Oil, Hindustan Petroleum, and Bharat Petroleum are channeling funds into refinery expansions, petrochemical and biofuel plants, pipelines, depots and natural gas distribution infrastructure.
A significant portion of Hindustan Petroleum’s investment is directed towards its greenfield refinery in Barmer, which has experienced notable cost escalations. Meanwhile, ONGC and Oil India are primarily focused on exploration and production activities.