Calcutta, July 3 :    Calcutta, July 3:  Indian Oil Corporation (IOC) has decided to put on hold its 9-million tonne Paradeep refinery project, which entailed an investment of over Rs 8,300 crore. Sources said the narrowing of gap between the demand and supply of petro products in the country has prompted the company not to pursue the project until the situation looks up. 'The country's refining capacity stands at 114 million tonnes, while total consumption of petroleum products was barely 100 million tonnes. In this situation, there is hardly room for a new refinery,' sources said. At the same time, refining margins have plunged in the wake of rising international prices of crude oil. 'Now the more we produce, the more we lose,' they said. Paradeep refinery was one of the most ambitious projects that the country's largest oil company ever embarked on. Until last year, former IOC chairman M. A. Pathan sounded optimistic about it, saying the company would go alone with the project even if it did not get a partner. IOC had a long discussion with Aramco of Saudi Arabia, which had initially shown interest. Sources said the current growth pattern in the oil industry could hardly provide an impetus to new projects. However, IOC is weighing options on laying a crude oil pipeline that will link Paradeep to Haldia in West Bengal. Sources said the move seems to have been taken to transport crude from Paradeep port to Haldia. Indian Oil is also considering a floating storage terminal at the Sandheads near Haldia to import crude and feed its refinery there. At present, IOC owns seven of the country's 17 refineries, which have an annual capacity of 38 million tonnes. Sources said Indian Oil's refineries produced only 80 per cent of its capacity last year. This year too, they said, the processing quantity would remain around that level. Paradeep is not the only project to have been put off. The company is dithering on making investments in the brownfield expansion of Koyeli and Panipat refineries too. The Fortune 500 company planned to double the capacity of its Panipat refinery and carry out an expansion-cum-upgradation of Koyeli. Panipat would require over Rs 3,370 crore, while retooling Koyeli would cost Rs 3,000 crore. 'It is not difficult to embark on an expansion project, but the decision has to match the current demand-supply scenario. We don't want to create fresh capacity when there is no growth in demand,' a senior official of the public sector oil major said.