Hindustan Petroleum Corporation Limited and Castrol India have entered into a Memorandum of Understanding to explore the development of a Re-Refined Base Oil ecosystem in the country.
The partnership, announced on Monday, will see both companies evaluate a model for collecting used lubricating oil and having it re-refined for use in lubricant production. The collaboration will assess the commercial, operational and technical feasibility of implementing such a circular model at scale.
Ch Srinivas, Executive Director – Lubes at HPCL, noted that circularity in value chains will become increasingly important as energy markets transition. He said the partnership aims to assess a structured ecosystem for collection and re-refining of used oil, which would help recover material value while promoting responsible resource use.
Saugata Basuray, Interim CEO of Castrol India, described used oil as a valuable resource if collected and processed appropriately. He said the MoU would allow the companies to explore a model that could reduce waste, lower environmental impact and support India’s growing focus on circularity.
India generates significant volumes of used lubricating oil annually, with much of it either under-collected or disposed of informally. International studies indicate that re-refining used oil can recover up to 70-80 percent of it as high-quality base oil, while using considerably less energy than refining crude-based virgin base oils. Re-refined base oil, when processed to required specifications, has been demonstrated globally to perform on par with conventional base oils.
The companies will begin work on the assessment immediately, including mapping collection channels, evaluating re-refining capacity and testing re-refined base oil for suitability across lubricant formulations. Findings from the study will guide the next phase of the initiative.
HPCL, formed in 1974, is a Maharatna central public sector enterprise that achieved sales volume of 49.8 million metric tonnes and processed 25.3 million tonnes of crude during 2024-25. The company operates refineries in Mumbai and Visakhapatnam and maintains over 24,000 retail outlets across India.
Castrol India, part of the bp group, has been present in India for 115 years and operates three blending plants with a distribution network reaching over 150,000 retail outlets nationwide.