India currently has 2.6 million barrels per day of refining capacity while domestic consumption is just 2.2 million barrels. By 2012, refining capacity is expected to rise to 4.84 million barrels per day. Among the country’s new refinery projects: Essar Oil’s $2.2 billion plant on the west coast, at Vadinar in Gujarat state. The refinery, commissioned in November, will initially produce 150,000 barrels per day of gasoline, diesel, liquefied petroleum gas, and kerosene. It will reach its full 210,000 barrel capacity by April 2007, when it will also expand its range of products. By 2009, Essar hopes to expand the refinery to a capacity of 320,000 barrels per day.

The plant will feed Essar Oil’s network of around 900 filling stations throughout the country. That network is set to rise to 2,000 outlets over the coming months. Essar will export up to 40 percent of its Vadinar products, targeting Singapore, Japan, west Africa, and even Europe.

In addition, IOC, Hindustan, and Bharat are all planning expansions to their existing refineries. All of this new capacity could allow India to nearly quadruple its refined products exports by 2012, when the country expects to be shipping some 93 million tons per year, a dramatic increase over its current 21.5 million tons.

India’s “refiners have expanded well ahead of demand, which needs to catch up,’’ said Koh Ban Heng of Singapore Petroleum Co. “India’s expected growth in fuel demand hasn’t taken off.’’ That’s particularly true in comparison to China, where retail fuel sales jumped by 34 percent in 2005. “India is about 10 years behind China in terms of demand growth,’’ Koh said. India has to export its surplus, which is mainly heading to western markets and Africa, “making India an important player’’ globally.