© The Indian Express Pvt Ltd
Tags:
Journalism of Courage
Public sector oil and gas companies have already achieved over three-fourths of their cumulative capital expenditure (capex) target for the current financial year ending March (FY24), taking a lead over most large public sector undertakings (PSUs) under other central government ministries, latest government data shows.
Capex refers to expenses or investments made by companies to buy or upgrade long-term fixed assets like land, production units, and equipment for fostering growth. India’s oil and gas companies are working to rapidly expand capacities and capabilities on multiple fronts–exploration and production, refining and petrochemicals, fuel retail, and gas infrastructure–as the country’s energy demand is expected to rise significantly over the coming years.
In the first eight months of FY24, 10 oil and gas PSUs with a cumulative capex aim of Rs 1.07 lakh crore for the fiscal spent a total of Rs 81,828 crore, or 76.6 per cent, according to data from the Department of Public Enterprises (DPE). The DPE actively tracks the capex progress of all PSUs with an annual capex target of over Rs 100 crore. Ten of the 12 PSUs under the petroleum ministry have a capex aim over that threshold for FY24.
The combined capex achievement level of the 10 oil and gas PSUs is significantly higher than the overall achievement of 66.6 per cent cumulatively by all PSUs over the Rs 100-crore capex threshold. In all, there are 59 such PSUs from a total of 19 ministries. These companies have a collective capex target of Rs 7.33 lakh crore for the current fiscal, of which, Rs 4.88 lakh crore was spent in the April-November period. The collective capex aim of these 59 PSUs accounts for 73 per cent of the Centre’s overall capex target of Rs 10.01 lakh crore for the fiscal.
Over the past few years, raising government capex has been a key element of the Centre’s strategy to generate demand in the economy, spur economic growth, and crowd in private sector investment. The Rs 10.01-lakh-crore capex announced by Finance Minister Nirmala Sitharaman in the Budget for FY24 was 33 per cent higher year-on-year. The FY24 capex is almost three times the Centre’s capital outlay for FY20.
Only the shipping ministry exceeds the petroleum ministry in terms of percentage achievement of capex of large PSUs. However, it is worth noting that just one shipping ministry PSU–Cochin Shipyard–is among these 59 PSUs and has a capex aim of just Rs 300 crore for FY24, of which it achieved 87.6 per cent till November.
Key infrastructure Ministries whose PSUs did not meet even 60 per cent of their capex targets till November include the likes of renewable energy, steel, and power. Of its FY24 capex aim of Rs 2,051 crore, Solar Energy Corporation of India (SECI) achieved just 14.2 per cent till November. SECI is the only PSU of the renewable energy ministry among the 59 companies. Six PSUs of the steel ministry achieved 51.7 per cent of their cumulative capex aim of Rs 10,260 crore in April-November. As for the power ministry, which has seven PSUs among the 59 companies, Rs 33,460 crore were spent, accounting for 54.9 per cent of the annual target of Rs 60,938 crore.
In terms of the PSU capex target, the petroleum ministry stands third in the pecking order. The railway ministry tops the list with an aim of Rs 2.73 lakh crore (64.7 per cent achieved till November), followed by the roads transport and highways ministry with a target of Rs 1.62 lakh crore (71.1 per cent achieved). The high capex aims for railway and road PSUs mean that they trail oil PSUs in terms of target achievement despite having spent more in absolute terms.
Among the oil and gas PSUs, refiner and fuel retailer Hindustan Petroleum Corporation (HPCL) has already exceeded its FY24 capex target of Rs 10,210 crore by spending Rs 11,904 crore till November. The country’s largest refiner and fuel retailer Indian Oil Corporation (IOC), which has the highest capex aim–Rs 30,395 crore–among all oil and gas PSUs, achieved 85.5 per cent of the target by November. India’s largest upstream oil company Oil and Natural Gas Corporation (ONGC) spent Rs 20,330 crore as capex in April-November, achieving 67.5 per cent of its Rs 30,125-crore aim for FY24.
Government-owned refiner Bharat Petroleum Corporation (BPCL) achieved 65.9 per cent of its FY24 capex target of Rs 10,000 crore till November, while gas major GAIL achieved 79.4 per cent of its Rs 7,750-crore aim. Assam-based Numaligarh Refinery (NRL), which is undergoing a massive capacity expansion and upgradation project, spent till November 54.6 per cent of its Rs 8,790-crore target for the fiscal. Upstream oil player Oil India (OIL), which has a capex target of Rs 4,896 crore for FY24, spent Rs 3,087 crore till November. ONGC Videsh (OVL), the overseas investment arm of ONGC, has already met 58.6 per cent of its Rs 3,229-crore capex aim for the fiscal.
Refiners Mangalore Refinery and Petrochemicals (MRPL) and Chennai Petroleum Corporation (CPCL), each with a capex target of under Rs 1,000 crore for FY24, achieved 82.7 per cent and 73 per cent, respectively, of their individual aim till November. MRPL’s FY24 capex target is Rs 820 crore, while CPCL’s stands at Rs 548 crore.
