India's Oil and Gas Boom: Refinery Growth Meets Global Challenges

India's oil and gas demand will remain strong in the next fiscal year, despite global challenges affecting refining margins. Downstream oil companies are expected to maintain stable credit profiles due to healthy marketing margins. Upstream firms face pressure from fluctuating prices but will benefit from new discoveries.

As India braces for another year of robust oil and gas demand, financial forecasts indicate a challenging yet promising landscape. Despite global sluggishness affecting refining margins, downstream oil giants are slated to maintain a stable credit outlook, buoyed by strong marketing margins, according to India Ratings and Research (Ind-Ra).

The credit landscape for upstream oil companies, however, remains volatile, primarily hinging on fluctuating crude prices. While there might be a dip in EBITDA due to reduced output from older fields, relief comes from policy shifts like the removal of special excise taxes and new field outputs.

Moreover, India's aggressive expansion of refinery capacity, projected to grow by 22% over the next few years, reflects the nation's intent to cater to rising domestic demand. Despite potential pressures in the CGD and standalone petrochemical sectors, experts anticipate healthy returns due to improving crack spreads and strategic investments.

(With inputs from agencies.)