Chennai : Chennai Petroleum Corporation Limited (CPCL), a subsidiary of Indian Oil Corporation Limited (IndianOil/IOC), has announced plans to significantly expand the refining capacity of its flagship Manali Refinery in Tamil Nadu. The proposal, outlined in the company’s Annual Report for FY 2025–26, aims to increase the refinery’s processing capacity from 2.1 lakh barrels per day (bpd) to 2.8 lakh bpd, marking an increase of nearly 33 percent.
The planned expansion is part of CPCL’s long-term growth strategy to strengthen its refining capabilities, diversify its business operations, and support India’s growing demand for petroleum products and petrochemicals.
One of Southern India’s Key Refineries Set for Capacity Boost
Located at Manali, near Chennai, the refinery is CPCL’s largest and most important operational asset. The facility manufactures a wide range of petroleum products, including transportation fuels, lubricants, industrial waxes, and petrochemical feedstocks, serving both domestic and industrial markets.
According to the annual report, the proposed expansion will raise the refinery’s processing capacity by approximately 70,000 barrels per day, enhancing operational efficiency and enabling the company to meet increasing energy demand.
Current and Proposed Refining Capacity
| Particulars | Capacity |
|---|---|
| Current Refining Capacity | 2,10,000 barrels per day (bpd) |
| Proposed Refining Capacity | 2,80,000 barrels per day (bpd) |
| Net Capacity Increase | 70,000 barrels per day |
| Percentage Growth | Approximately 33% |
While the expansion plan has been formally announced, CPCL has not yet disclosed a definitive timeline for implementation or project completion.
Feasibility Study Underway
The refinery expansion proposal follows earlier comments made by CPCL Managing Director H. Shankar, who had stated in December 2025 that a comprehensive feasibility study was expected to be completed by October 2026.
The study will determine several critical aspects of the project, including:
- Capital investment requirements
- Technical configuration of new processing units
- Project implementation roadmap
- Commercial viability and operational efficiency
The findings will help CPCL finalize the expansion strategy before moving toward execution.
High Capacity Utilisation Supports Expansion
The Manali Refinery has consistently operated at high capacity utilisation levels in recent years, reflecting strong market demand and efficient plant operations.
Industry analysts believe the proposed capacity enhancement will enable CPCL to:
- Process larger volumes of crude oil
- Increase production of transportation fuels
- Expand petrochemical feedstock output
- Improve refining margins
- Strengthen supply security in southern India
The project is expected to further reinforce CPCL’s role within the Indian Oil Group, one of India’s largest integrated energy companies.
Expansion Beyond Traditional Refining
In addition to increasing refining capacity, CPCL is pursuing several strategic diversification initiatives designed to transform the company into a broader integrated energy enterprise.
Fuel Retail Expansion
The company is entering the retail fuel marketing business, with plans to establish 300 fuel retail outlets across the country.
CPCL achieved an important milestone earlier this year by inaugurating its first retail fuel station in March 2026, marking its entry into the competitive downstream retail segment.
Nagapattinam Petrochemical Development
CPCL is also reconfiguring its proposed Cauvery Basin Project in Nagapattinam to increase its petrochemical intensity. The revised project aims to produce higher-value petrochemical products alongside conventional refinery outputs, aligning with changing industry trends and improving long-term profitability.
Supporting India’s Energy Growth
The proposed expansion comes at a time when India’s energy demand continues to rise due to rapid industrialisation, urbanisation, and increasing consumption of transportation fuels.
Expanding domestic refining capacity will help:
- Strengthen India’s energy security
- Reduce dependence on imported refined petroleum products
- Support industrial and manufacturing growth
- Increase the availability of petrochemical feedstocks
- Create opportunities for future downstream investments
The Manali expansion is expected to play an important role in supporting the country’s evolving energy landscape while complementing IndianOil’s broader strategy of modernising and expanding its refining infrastructure.
Looking Ahead
Although the company has yet to announce a final execution schedule, the proposed expansion of the Manali Refinery represents one of CPCL’s most significant capacity enhancement initiatives in recent years. Combined with its expansion into fuel retailing and petrochemical manufacturing, the project reflects the company’s vision of evolving beyond a standalone refinery into a diversified downstream energy and petrochemical enterprise.
Once implemented, the increased refining capacity is expected to improve operational flexibility, strengthen CPCL’s market position, and contribute significantly to India’s growing demand for cleaner and more efficient petroleum products.
