State-owned HPCL buys fuels from refiners such as Mangalore Refinery and Petrochemicals, Nayara Energy and Reliance Industries as its domestic sales are higher than the output from its two refineries at Mumbai in western India and Vizag in the southern state of Andhra Pradesh.

It also buys refined fuels from its joint venture company HPCL-Mittal Energy.

Vizag refinery will operate at 13.5 mtpa capacity in the current fiscal year and at full capacity of 15 mtpa in the next fiscal, Bharathan said.

The 3 mtpa hydrocracker will maximise diesel output and operate at a rate of 1.5 mtpa in the second half of this fiscal year to March, he said adding, that in the next fiscal year the hydrocracker will operate at 2.4 mtpa capacity.

Separately, Pushp Kumar Joshi, chairman of HPCL, said the company hopes to commission a 5 mtpa liquefied natural gas terminal in western India in November-December.

India's fuel demand is expected to recover from this month due to higher demand during the festival season, Joshi said.

HPCL has leased 300,000 tonnes of space at Vizag Strategic Petroleum Reserves, he added.

(Reporting by Nidhi Verma in New Delhi; Editing by Eileen Soreng)