India Charts Course for Energy Shipping Independence with $600 Million Tanker Plan

Key Highlights

• Bitumen & Oil Prices Vary by Region: VG40 bulk at ₹36,890/MT in Karwar; SN150 barrel at ₹68.5/kg in Delhi; lubricants priced up to ₹122/ltr.
• India Orders 10 Domestic MR Tankers: Estimated at $600M, with a 15–20% premium over imports from Korea/China.
• Domestic Supply Constraints: Only 4 Indian shipyards can handle large vessels, leading to longer timelines and higher costs.
• Strategic Energy Shift: Government push for “Make in India” aims to boost logistics autonomy despite economic strain.

Bitumen, Base Oil & Lubricants Trade Mixed Across India

• Roadgrip Bitumen VG40 in bulk is priced at ₹36,890/MT in Karwar, while refinery-grade VG30 bulk bitumen is being offered at ₹48,382/MT in Mathura. 
• In Pithampur, Roadgrip Bitumen Emulsion RS1 (bulk) stands at ₹32,290/MT, and the SS1 variant in drum packaging is available at ₹33,390/MT. 
• Base Oil SN150 is priced at ₹68.5/kg in barrel form in Delhi, and its bulk counterpart is quoted at ₹62/ltr in Kandla. Virgin 180cST Furnace Oil in bulk is trading at ₹50/kg in Mundra. 
• For rubber process oils, Sephan Aromatic (barrels) is available at ₹45.5/kg in Mundra, while Iranol Aromatic (bulk) is priced at ₹44/kg in Mumbai. 
• In the lubricants segment, LubriEdge Hydraulic Oil 68 (bucket) is at ₹91/ltr in Bhiwadi, Gear Oil 150 (barrel) at ₹115/ltr, Rust Preventive Oil (WDM type, barrel) at ₹122/ltr, and Metal Working Fluid (Soluble Cutting Oil, barrel) at ₹112/ltr—all in Bhiwadi.

India’s MR Tanker Orders Cost 15–20% More Than Imports

India’s state-run refiners are planning to invest an estimated $600 million to procure 10 medium-range (MR) tankers, with each vessel expected to be priced between $55 million and $60 million.

1. Indian Oil Corporation (IOC) is expected to acquire six vessels.
2. Bharat Petroleum (BPCL) and Hindustan Petroleum (HPCL) will purchase two vessels each.
3. In comparison, South Korean-built MR tankers were priced at $50 million last month, while Chinese-built alternatives were $7 million cheaper, indicating a 15–20% premium for India’s domestic shipbuilding.

Demand & Supply Dynamics

India is experiencing a strategic shift toward self-reliance in shipbuilding and energy logistics, especially for coastal fuel transportation.

1. Current Scenario: Around 13% of India’s petroleum products are moved via coastal shipping, while over 50% are transported through pipelines. The rest moves by road and rail.

2. Demand Growth Factors:

1. Expanding refinery output
2. Increasing intra-country coastal fuel movement
3. A push for strategic energy resilience

3. Supply Constraints:

1. India has 40 shipyards, but only four are equipped to build vessels larger than MR tankers.
2. Building domestically will stretch delivery timelines (expected by 2028), and inflate costs due to limited capacity and expertise compared to global players.

4. Strategic Shipbuilding: Despite these challenges, the government is encouraging domestic builds to boost Make in India and reduce import dependency in defense and energy transport infrastructure.

Oil Market News

• Joint Tender Issuance Expected: IOC, BPCL, and HPCL are preparing a joint tender later this year to place orders for 10 MR tankers.
• Push for Strategic Autonomy: The Indian government views ships as strategic national assets, relevant not just for trade, but also for energy and defense preparedness.
• Refiners Seek Financial Support: The three refiners are reportedly reluctant to directly operate the vessels due to high capex and ownership risks, and have approached the government for financial incentives or subsidies.
• Global Price Benchmarking: The choice to build locally means paying $5–12 million more per ship compared to options from Korea or China, adding to cost concerns but supporting local employment and industrial development.
• Geopolitical Context: With increasing focus on logistics autonomy, India’s strategic oil transport planning now incorporates coastal routes as part of energy security frameworks.

Expert Opinion: National Resilience vs. Cost Efficiency

The move underscores India’s intent to reduce reliance on foreign-built vessels despite higher upfront costs. While economically it may strain refiners’ margins, strategically it builds long-term resilience. Government support and efficient execution will be critical to making this domestic shipbuilding initiative viable and sustainable.