There is a growing debate among the players on fossil fuel demand— while some feel the demand will drop; there are others that are optimistic that demand will continue for the next few decades. Bharat Petroleum Corporation Ltd’s (BPCL), CMD, D Rajkumar strongly believes that demand will rise for next two decades. To reiterate this belief, the company plans an investment of Rs 1.10 lakh crore over the next five years.
Speaking to reporters, Rajkumar said, “In the next five years, we plan to invest around Rs 1.10 lakh crore at the group level. The investment will take place in refining, enhancing the petrochemical capacity, upstream forays, gas profileration, marketing and so on. “For refineries upgrade and expansion, we plan to invest Rs 20,000 crore. The investments are planned basically keeping petrochemicals in mind,” he added giving some more information on the investments. However, this decision to enhance petrochemicals was taken keeping in mind the decline in demand for diesel which may take a hit due to electric vehicles (EVs).
In the short term, the company is expecting a marginal hit due to slowdown. However, in the long run, the company expects the demand to continue rising for next two decades. “Demand of oil will not fall to a large extent. The PPAC (Petroleum Planning and Analysis Cell) report and the working group in the ministry also indicate that until 2040 that demand for petroleum products will continue,” Rajkumar said. He also pointed out that all the major international companies are on an expansion spree. “We are of the assumption that until 2040 there will not be much impact on demand for petroleum products.” Keeping this growth in mind, the company is not investing aggressively in non-conventional energy like others in the competition. BPCL, director (finance), N Vijayagopal, said, “We are investing but it’s minuscule compared to our other investments.”
Meanwhile, another BPCL executive who is familiar with the matter said, “Electric Vehicles is not the only solution. There is a need to study and explore other options too.” An executive added, for new technologies to flourish there is a lot of other factors that need to fall in place for it to become successful. “EVs and their batteries have to evolve much more before it becomes mainstream.” Throwing light on the impact due to the economic slowdown in the country, one of the executives of BPCL said, “The slowdown is there for sure, but the impact of it can only be known a few months down the line.”