Indian Oil to Build New POL Terminal in Andaman & Nicobar

Indian Oil Corporation (IOC) is planning to set up a new petroleum, oils and lubricants (POL) terminal in the Andaman & Nicobar Islands. This comes amid rising fuel consumption in the region. The terminal is expected to be operational within five years. The company is currently in the process of acquiring land for the project.

Existing Terminal and Current Supply

At present, Indian Oil operates the only POL terminal in the islands, with a total capacity of 27,847 kilolitres. No other state-run oil marketing companies, including Bharat Petroleum Corporation Ltd (BPCL) or Hindustan Petroleum Corporation Ltd (HPCL), have fuel storage or supply infrastructure in the region.

Fuel products are supplied to the islands from IOC’s Paradip and Haldia refineries. LPG is imported from the Middle East and transported to the IOC-operated LPG bottling plant in the islands.

Fuel Consumption Patterns

Diesel is the most consumed petroleum product in the islands and is mainly used for power generation, as per news reports. In FY25, diesel consumption rose 1.41% year-on-year to 1.43 lakh kilolitres. Approximately 70% of the diesel volume is used for electricity generation.

Petrol consumption grew by 6% over the previous year. Low sulphur high flash high speed diesel (LSHF HSD), used by Indian Navy vessels, saw a 24% increase in demand. Aviation turbine fuel (ATF) demand declined by 5.43% during the same period.

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LPG Bottling and Demand

IOC’s LPG bottling plant in the islands has a capacity of 15,000 metric tonnes per annum. In FY25, LPG consumption reached 12,731 metric tonnes, marking a 3% increase from the previous year.

Population and Infrastructure

According to a 2019 survey, the Andaman & Nicobar Islands have a population of 4.34 lakh. Of the total 836 islands, only 31 are inhabited. Fuel demand has shown steady growth over the past 5 years.

Indian Oil Share Performance 

As of 9:42 AM on June 13, Indian Oil Corp share price was trading at ₹139.85, down 2.20%, with a 3.04% decline over the past 6 months and a 17.22% drop in the past year.

Conclusion

The proposed terminal will add to the existing infrastructure and support growing fuel needs in the islands over the coming years. Capacity details will be finalised based on demand projections.

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