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Indian refinery runs plummet in April
PERFORMANCE
INDIA’S refinery runs fell 28.8% year on year to 14.75mn tonnes (3.6mn barrels per day) in April as the country’s prolonged coronavirus (COVID-19) lockdown drove down oil prod- uct demand.
Fuel demand shrank 45.8% on the year to 9.93mn tonnes, government data showed ear- lier this month. The lowest demand levels in more than a decade saw the country’s refiners operate at about 72% of their 5mn bpd com- bined capacity.
State-run Indian Oil Corp.’s (IOC) refin- eries ran at 53% of capacity, while subsidiary Chennai Petroleum’s refineries operated at 33% of capacity. Private major Reliance Indus- tries Ltd’s (RIL) 700,000 bpd Jamnagar refin- ery operated at 87% of capacity, while Nayara Energy’s 400,000 bpd Vadinar facility ran at 85% of capacity.
India has extended its nationwide restrictions until May 31, though less populated rural areas have seen some relaxation of the rules.
Bloomberg reported on May 21 that India’s state-owned oil marketing companies (OMCs) do not expect to see oil demand fully recover until the end of the year. The newswire quoted OMC executives as saying consumption was around 40% less than this time last year. India
demand in May 2019 amounted to 4.6mn bpd, suggesting current consumption is around 2.76mn bpd.
Executives said gasoline demand is about 47% lower than this time last year, while diesel consumption is 35% lower.
“Demand is reaching 60-70% of normal, but itwilltakesometimetogettopre-COVIDsales,” Hindustan Petroleum Corporation Ltd (HPCL) chairman Mukesh Kumar Surana said. “Over a period of two to three months, we should get back to 80% of normal sales. Beyond that, it will be slow.”
Bharat Petroleum Corporation Ltd’s (BPCL) director of refineries, R Ramachan- dran, anticipates that fuel demand will reach 80-85% of pre-lockdown levels within the next four months, declining to provide longer-term predictions. The executive said: “Only time will tell [what the full impact is] and we will need to wait.”
The Paris-based International Energy Agency (IEA) forecast this month that India’s oil demand would return to pre-pandemic levels by the fourth quarter. It predicts that overall oil demand will decline by 8% this year, with diesel and gasoline consumption likely to drop by 12%.™
Pakistan may cut fuel prices despite refiners’ concerns
POLICY
PAKISTAN’S Oil and Gas Regulatory Authority (OGRA) has reportedly called for retail gasoline prices to be reduced despite warnings of a loom- ing fuel shortage.
OGRA has recommended a PKR5-10 ($0.031-0.062) cut in gasoline prices to the Energy Ministry, Bol News reported on May 28. Once the ministry has approved the recommen- dation it will then go before the Finance Minis- try. Bol News said the current price for gasoline was PKR81.58 ($0.505) per litre.
Pakistan Today, meanwhile, reported that OGRA was recommending a PKR2 ($0.012) cut to the current price of price. High speed diesel is currently selling for PKR80.1 ($0.496) per litre, while light diesel is fetching PKR47.51 ($0.294) per litre.
The recommendation is something of a sur- prise, given recent reports that low fuel prices could force the country’s refineries to cut pro- duction and thus potentially open to the door to supply shortages.
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w w w . N E W S B A S E . c o m Week 21 28•May•2020