India to continue prompt fuel exports for at least two more weeks
A three-week lockdown due to end in mid-April slashed state fuel retailers’ local diesel sales by about 26 per cent and petrol by about 17 per cent in March, provisional data shows
NEW DELHI/SINGAPORE: Indian refiners are likely to continue prompt export of refined fuels for at least another two weeks to avoid a complete shutdown after the coronavirus lockdown hit local demand, company officials said. A three-week lockdown due to end in mid-April slashed state fuel retailers’ local diesel sales by about 26 per cent and petrol by about 17 per cent in March, provisional data shows.
Indian Oil Corp, Bharat Petroleum Corp and Hindustan Petroleum Corp control about 90 per cent of fuel pumps in India, where falling fuel consumption has deepened crude refining cuts by state refiners.
Some have declared force majeure on crude purchases as storage facilities are full. India’s fuel consumption is expected to recover over the next 10-15 days as recent steps by the government, including movement of trucks to carry non-essential items will push up demand, R. Ramachandran, head of refineries at BPCL, said. BPCL’s average crude processing has declined to 60 per cent, from 90 per cent reported on March 24, he said, adding: “In order to operate the refineries above the turndown levels and to balance the refinery runs and the inventory build up, it is essential for us to look at selective exports.”
Indian state refiners rarely export gasoil and HPCL and Mangalore Refinery and Petrochemicals Ltd sporadically export gasoline. In a rare move, the country’s top refiner IOC recently issued tenders to export more than 50,000 tonnes of gasoline and some reformate for April loading. “It will be difficult to operate in this situation for too long … we may have to shut one or two refineries if demand doesn’t recover,” said Sanjiv Singh, chairman of Indian Oil Corp . Another company official said IOC’s 11 refineries are operating at about 50 per cent capacity, compared to 70 per cent-75 per cent previously reported.
“It is better to shut the plant than operating below 30 per cent-35 per cent capacity … refinery is a critical plant,” the source, who did not wish to be identified, told Reuters. Private refiner Nayara Energy, part-owned by Russian oil giant Rosneft, which usually exports naphtha and gasoline, has also offered reformate for April lifting. MRPL has issued tenders to export 130,000 tonnes diesel and 25,000 tonnes of gasoline in April “India’s April gasoil exports have accumulated to 900,000 tonnes, excluding the exports from Reliance. So, with those of Reliance combined, we expect April exports will be at a record high,” an Asian trader said MRPL has reduced its crude refining to 50 per cent from a previously reported cut of 33 per cent, its managing director M. Venkatesh said. “We are trying our best not to export prompt cargoes, but for the next one to two weeks it will be like this,” he added.