Indian Oil’s ₹611-cr. Malkapur terminal likely to go on stream in 2023

End point for Paradip-Hyderabad pipeline, the storage facility will augment fuel availability in Telangana

A petroleum terminal being set up by Indian Oil Corporation in Malkapur, near Hyderabad, with an investment of ₹611 crore, is likely to go on stream next year.

As it will be the culimating point for the 1,212-km Paradip-Hyderabad product pipeline, the terminal is expected to provide Indian Oil leverage in terms of fuel supplies in Telangana. “By December 2023, we will be able to commission the terminal... bring our own product,” Executive Director and State Head of India Oil for Telangana and Andhra Pradesh B.Anil Kumar said here on Wednesday.

The pipeline, entailing an investment of ₹3,338 crore, is for moving petrol and diesel from the public sector oil major’s Paradip refinery in Odisha to Hyderabad, which is one of the major consumption zones, and connect Visakhapatnam, Vijayawada and a few other locations in Andhra Pradesh en route.

Vijayawada has started getting diesel supplies over the pipeline from this month. “The pipeline work has been completed and tankage work is going on in Malkapur,” Mr. Anil Kumar said in a media interaction, his first after assuming office as Executive Director in September. The terminal will have a storage capacity of 1.80 lakh kilolitres.

Once commissioned, the pipeline and terminal are expected to reduce reliance of Indian Oil on Hindustan Petroleum Corporation’s Visakhapatnam-Hyderabad pipeline for fuel supplies in Telangana. Indian Oil will also be shifting operations of its terminal in Cherlapally, near Hyderabad. The Cherlapally facility is, however, unlikely to be shut, he added.

To queries, he said petrol and diesel consumption in Telangana surpassed pre-COVID retail sales levels. Petrol consumption during April-November was 13.2% higher compared to the same period last fiscal. Retail diesel usage was 10.2% more in the same period. Average monthly sales is around 1.23 lakh tonnes petrol and 2.66 lakh tonnea diesel.

While petrol offtake is growing on the back of Hyderabad and surrounding areas expanding, growth in diesel consumption is stunted in Telangana and Andhra Pradesh because of higher value-added tax levy in the two States. “The price disparity is high becaue of local taxes,” Mr. Anil Kumar said, citing how heavy vehicles plying interstate prefer to tank up at retail outlets in neighbouring Maharashtra, Karnataka and Odisha to benefit from the lower prices.