India to continue prompt fuel exports for at least two more weeks

  • Reuters
  • Commodities News
India to continue prompt fuel exports for at least two more weeks

* BPCL refining rate 60%, from about 90% two weeks ago

* IOC's crude refining at 11 plants about 50%, from 70%-75%

* IOC may have to shut 1-2 refineries if no demand increase

* MRPL's refinery operating at 50% capacity, down from 66%

* Firms boost exports to keep plants above turndown levels

By Nidhi Verma, Seng Li Peng and Koustav Samanta

NEW DELHI/SINGAPORE, April 7 (Reuters) - 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% and petrol by about 17% in March, provisional data shows. O/INDIA2

Indian Oil Corp IOC.NS , Bharat Petroleum Corp BPCL.NS and Hindustan Petroleum Corp HPCL.NS control about 90% of fuel pumps in India, where falling fuel consumption has deepened crude refining cuts by state refiners. have declared force majeure on crude purchases as storage facilities are full. 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%, from 90% 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 MRPL.NS 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 IOC.NS . Another company official said IOC's 11 refineries are operating at about 50% capacity, compared to 70%-75% previously reported. is better to shut the plant than operating below 30%-35% 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 ROSN.MM , 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% from a previously reported cut of 33%, 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.

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