HPCL’s Kaushal Sees Cost Discipline As Key As Energy Risks Multiply
At the company level, HPCL is focusing on cost efficiency to build resilience against price volatility.
The Gist
India's energy sector is poised for growth in both traditional fuels and renewables, with oil demand projected to rise longer than previously expected.
- Vikas Kaushal, HPCL's Chairman, highlights the need for diverse energy sources to support India's 8% economic growth.
- India is enhancing its refining capacity, aiming to reach over 310 million tonnes in the coming years.
- Despite geopolitical tensions, crude oil prices remain stable, allowing for flexible sourcing strategies in crude procurement.
India’s energy landscape is entering a phase where growth in traditional fuels will continue alongside a rapid expansion in renewables, with oil demand expected to rise for longer than earlier projections, according to Vikas Kaushal, Chairman and Managing Director of Hindustan Petroleum Corporation Ltd (HPCL).
Speaking to The Core as part of India Energy Week, Kaushal said India’s economic growth — clocked at around 8 per cent in the last quarter — will require all forms of energy. “India will need all forms of energy… renewable energy, thermal power, oil and gas capacities,” he said, adding that the country is simultaneously expanding conventional energy while taking “the leap on renewables”.
India currently has around 258 million tonnes of refining capacity, with another 40–45 million tonnes under construction, including projects by HPCL. “We expect in the next couple of years this goes up to 310 plus,” Kaushal said. He added that rising consumption of petrol, diesel, LPG and aviation fuel implies India needs 8–10 million tonnes of additional refining capacity every year to keep pace with demand.
Despite global geopolitical tensions, crude oil prices have remained relatively stable. Kaushal noted that 2025 did not deliver the supply shock many had feared. “It never crossed a threshold where it was a shock,” he said, pointing out that prices largely hovered around the $60 per barrel range despite conflicts in West Asia and the continuing Russia–Ukraine war.
Shift In Crude Buying
India imports around 85% of its crude oil, sourcing supplies from dozens of countries. HPCL alone imports crude from over 20 countries annually and can process up to 200 types of crude, giving it flexibility in sourcing. “The producers also have to sell the crude… if person A is not selling to me, I can buy from person B as long as I can run it economically in my refinery,” Kaushal said.
He added that Indian oil companies have become more agile in crude procurement, shifting from fixed buying patterns to more dynamic trading strategies. “The way we buy crude right now versus what we used to buy three or four years ago, there is a marked difference,” he said, citing increased use of market timing and optimisation.
On energy security, Kaushal said India’s dependence on imported energy is approaching a plateau and could decline over the next decade. This would be driven by higher domestic coal production, electrification of consumption, and large-scale renewable additions. “We are now living in that period where that increase is plateauing,” he said.
At the company level, HPCL is focusing on cost efficiency to build resilience against price volatility. The company has launched a cost-reduction programme aimed at lowering fixed costs. “Can I lower my fixed cost so that I build in longer-term resilience for the organisation,” Kaushal said.
HPCL is also expanding into petrochemicals, despite weak global margins. Its Barmer refinery project includes an integrated petrochemical complex with 2.4 million tonnes of capacity. While acknowledging near-term challenges, Kaushal said India’s low per-capita petrochemical consumption provides long-term growth headroom.
On the consumer side, Kaushal said fuel retailing has evolved into a service-led business, with HPCL focusing on modernised stations, clean toilets, digital payments and EV charging. “If today I put in a dirty pump, you will never drive into my pump,” he said, underlining the shift towards customer experience.
As India Energy Week approaches, Kaushal said the event has become a key platform for business engagement, technology showcase and talent exposure, reflecting the growing vibrancy of India’s energy sector.
