NRL’s Aviation Fuel & Bio-Refinery Expansion to Reshape Eastern Market

Key Takeaways

• Fuel Oil Prices Stable: Virgin and standard 180cST grades hover between ₹46.5–48/kg, while LSHS trades at ₹55.5/kg in Jamnagar.
• Aviation Fuel Demand Climbs: Domestic ATF consumption grows ~7% YoY, driven by air traffic, low-cost carriers, and infrastructure push.
• NRL’s Odisha Plant in Focus: A 200 KTPA ATF facility is planned, expected to ease regional supply and support Net Zero goals.
• Bio-Energy Sees Expansion: Bamboo-based bio-refinery in Assam targets activated carbon, showing momentum in circular economy initiatives.
• Logistics & Market Optimism: Coastal project location, expanded pipelines, and product diversification improve long-term market outlook. 

Fuel Oil Price: Stability Across Regions

• Fuel oil prices vary across different grades and locations. Virgin 180cST Furnace Oil is priced at ₹46.5 per kg in Mumbai and ₹47.5 per kg in Mundra, both available in bulk packaging. 
• In comparison, the standard 180cST Furnace Oil grade in Mumbai is slightly higher, priced at ₹48 per kg. Meanwhile, Low Sulphur Heavy Stock (LSHS) is available in Jamnagar at a premium rate of ₹55.5 per kg, also in bulk packaging.

Fuel Oil Demand & Supply: Aviation Fuel Demand on the Rise

• India's aviation fuel demand continues to rise steadily, with an estimated 7% year-on-year growth, driven by increased air traffic, expanding low-cost carriers, and a growing emphasis on domestic connectivity. 
• The upcoming infrastructure from Numaligarh Refinery Limited (NRL), a subsidiary of Oil India Limited (OIL), is expected to enhance aviation turbine fuel (ATF) supply and support long-term domestic consumption needs.
• The planned 200 KTPA aviation fuel plant in Odisha will significantly strengthen supply in eastern India, aligning with national energy security and decarbonization goals. 
• In parallel, the region’s biofuel ecosystem is expanding, notably with the anticipated launch of a bamboo-based bio-refinery in Assam, targeting activated carbon production, further diversifying the downstream product portfolio.

Fuel Oil News Highlights: NRL’s Odisha ATF Plant to Ease Regional Supply Pressure

• NRL to set up a 200 KTPA aviation fuel plant in Odisha as part of its Net Zero strategy by 2040. The Detailed Project Report (DPR) is under preparation.
• The project is envisioned as a strategic long-term investment with the potential for exports in the future, although domestic demand is expected to remain the primary focus.
• NRL is scaling up refining capacity from 3 MMTPA to 9 MMTPA, backed by a 1,635 km crude pipeline from Paradip to Numaligarh.
• In Assam, the bio-refinery using bamboo dust is scheduled for commissioning this year, with a focus on activated carbon, supported by R&D inputs from IIT Guwahati.
• Activated carbon derived from biomass is in demand across cosmetics and personal care segments, reflecting cross-sectoral potential.

Market Expectations: Greater Supply Stability Anticipated

• The aviation fuel plant, once operational, is likely to reduce regional supply constraints and stabilize ATF pricing in eastern India. Market participants expect improved logistical efficiency due to the plant’s coastal location, enhancing its competitiveness.
• In the bio-energy segment, the upcoming bamboo-to-biofuel initiatives are seen as early indicators of India’s shift toward circular economy models. Activated carbon production may open up new B2B opportunities in the fast-growing FMCG and pharma sectors.
• Overall, stakeholders anticipate greater market diversification, improved supply assurance, and enhanced investor interest, particularly in green energy and sustainable fuel ventures.