Oil PSUs Spent 81% Of FY26 Capex Target

Of the ₹1.32 trillion capex target for FY26, State-run oil firms have already spent ₹1.07 trillion in the first 10 months.

Kindly note the image have only been published for representational purposes. Photograph: Kind courtesy Devon Chandler/Pixabay

Key Points

State-run oil companies have already used 81% of their planned investment for FY26 by January.
Capex trend rising: ₹1.14 trillion in FY23, ₹1.28 trillion in FY24 to ₹1.62 trillion in FY25.
OIL, HPCL, MRPL, CPCL, and EIL already exceeded FY26 targets (April to January).
IOCL (₹35,294 crore) and ONGC (₹34,900 crore) lead FY26 allocations.
India aims to strengthen its position as the world's fourth-largest refining hub.

81% Capex Utilised by January

India's oil public sector undertakings (PSUs) had utilised 81 per cent of their targeted capital expenditure for the current financial year by January end, according to fresh data sources from the oil ministry, as firms work aggressively to boost domestic production and refining capacities.

In recent years, Indian oil majors' capex has been on the rise as oil companies spent ₹1.62 trillion in FY25, compared to ₹1.28 trillion in FY24 and ₹1.14 trillion in FY23.

The State-run oil firms had spent ₹1.07 trillion in the first 10 months of financial year 2025-2026 (FY26) from the annual targeted capex of ₹1.32 trillion, according to data from the Petroleum Planning and Analysis Cell (PPAC).

At the current pace, the oil companies are likely to surpass their targeted capital expenditure in FY26, given they fully utilise their allocated capex.

Kindly note the image have only been published for representational purposes. Photograph: Kind courtesy Vijaya narasimha/Pixabay

Upstream Push to Boost Output

Several companies -- Oil India (OIL), Hindustan Petroleum Corporation (HPCL), Mangalore Refinery & Petrochem (MRPL), Chennai Petroleum Corporation (CPCL), and Engineers India (EIL) -- have already exceeded their annual targets during the April-January period.

Among the oil majors, Indian Oil (IOCL) and Oil and Natural Gas Corporation (ONGC) have earmarked the highest capex at ₹35,294 crore and ₹34,900 crore, respectively, for FY26, followed by Bharat Petroleum Corporation Ltd (BPCL) at ₹18,500 crore.

Last year, the oil companies had spent Rs 1.29 lakh crore in the April-January period, exceeding the set target of Rs 1.18 lakh crore.

Refining Capacity Expansion

Amid stagnant domestic production, India's upstream companies including ONGC and Oil India have intensified efforts to boost production from their mature oilfields while ramping up exploration activities in offshore areas which is inherently capital-intensive.

Oil firms are ramping up their capacity expansion drive as India, the world's fourth-largest refining hub, aims to position itself as a key global centre for petroleum refining.

Greenfield Projects in Focus

State-run refiners such as IOCL, BPCL, and HPCL are expanding refining capacity of their existing refinery-cum-petrochemical plants while also setting up greenfield refineries to meet rising energy demand.

HPCL has established a nine million tonnes per annum refinery in Rajasthan's Barmer district, likely to be commissioned in FY26, while BPCL is working on a refinery project in Andhra Pradesh.

In addition, Indian Oil's subsidiary CPCL is setting up a refinery and petrochemical plant in Tamil Nadu.

Feature Presentation: Rajesh Alva/Rediff