Indian refineries are usually not contracting increased crude provides as demand slows on account of near-term headwinds akin to increased gasoline costs and localized lockdowns, in response to S&P World Platts.
This comes towards the backdrop of the nationwide capital being positioned beneath a 10pm-5am every day curfew till the tip of the month and Maharashtra and Rajasthan placing curbs in place in an try and comprise coronavirus transmission.
Additionally Learn | How India’s banking model has changed
“Indian refiners are holding again crude runs as demand slows, with headwinds forward within the close to time period, together with excessive gasoline costs and localized lockdowns as a consequence of rising circumstances of covid-19,” mentioned Lim Jit Yang, adviser for Asia-Pacific oil markets at S&P World Platts Analytics in an announcement on Wednesday.
India, the world’s third-largest oil importer, spent $101.4 billion on crude oil imports in 2019-20 and $111.9 billion in 2018-19.
“Platts Analytics expects India’s oil demand in 2021 to stay barely beneath the 2019 stage as a consequence of weak point within the first half however will register a development of 440,000 b/d on the yr, after declining 470,000 b/d in 2020,” the assertion mentioned.
India is a key refining hub in Asia, with an put in capability of over 249.36 million tonnes every year (mtpa). It has 23 refineries and plans to develop its refining capability to 400 mtpa by 2025.
“Common run fee in any respect Indian refineries slipped to 97% in February from 103% in January, oil ministry knowledge confirmed, in contrast with the February 2020 run fee of 111%. For the April-February interval, common run fee stood at 88%, in contrast with 102% stage the year-ago, reflecting the general impression of the coronavirus lockdown,” the assertion reads.
The price of the Indian basket of crude, which contains Oman, Dubai and Brent crude, was at $60.93 a barrel on 7 April. Following the covid outbreak, crude costs for Indian basket of crude had plunged to $19.90 in April earlier than recovering to $64.73 a barrel in February, knowledge from the Petroleum Planning and Evaluation Cell confirmed.
“India’s demand for oil merchandise in February fell 4.9% on the yr to 17.2 million mt, or 4.8 million b/d (barrels per day), newest knowledge from the Petroleum Planning and Evaluation Cell confirmed, reflecting weak point in its financial system and the fallout of upper international crude costs,” the assertion reads.
“Demand for diesel fell 8.5% on the yr to six.6 million mt, whereas demand for gasoline fell 3% on the yr to 2.4 million mt in the identical month,” the assertion added.
This additionally comes on the time of US crude oil exports to India leaping to 2.11 million metric tonnes in February, serving to it dislodge Saudi Arabia because the second largest provider to India. The Indian authorities is engaged on diversifying the nation’s power basket with crude oil provides from non-Group of the Petroleum Exporting International locations (Opec) sources, after the Opec-plus grouping’s determination to retain provide curbs.
“General, Indian refiners processed 18.62 million mt of crude oil in February—a mean of 4.87 million b/d—down 11.84% yr on yr. The February quantity was 14.63% decrease from January ranges,” the assertion reads.