Petrochemicals can be new revenue-stream for oil refinery companies

Investments in petrochemicals can provide some offset to the inevitable long-term loss in transportation fuel demand, said Crisil Research in its report

What are the challenges for refineries?

a) Recent volatility in crude oil prices has led to shrinking in gross refinery margins

b) Demand growth for transportation fuels could be under pressure due to regulatory pressure and technological advancements

c) Increasing usage of electric vehicles may have a bearing on demand growth for fuels going ahead

Which product can boost the revenue stream of oil cos?

Through diversification, refiners can produce more value-added products such as petrochemicals

What percentage petrochemicals account for of the chemicals industry?

a) Petrochemicals account for 30% of the country's chemicals industry

b) Domestic demand has grown at a CAGR of 8-9%

Which are the industries that use these petrochemicals?

Packaging, automobiles, and electricals and electronics are the major users of petrochemicals

Which are the two products that form a major capacity for petrochemicals?

Ethylene and propylene constitute nearly 80% of the total capacity

What is the demand outlook for ethylene and propylene?

a) Crisil Research expects demand for ethylene and propylene to grow at a CAGR of 7-8% between fiscals 2018 and 2025.

b) Between fiscals 2025 and 2030, demand for these products would grow at 4-5%, said Crisil report