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Indian State Refiners Reduce Crude Processing as Fuel Demand Tumbles

India's state oil refiners are reducing crude processing as local fuel demand has tumbled due to lockdowns in much of the country that are aimed at halting the spread of coronavirus, industry and company officials said.

 

Asia's third largest economy with 1.4 billion people has reported about 500 cases of the virus but health experts say a big jump could be imminent. The government has halted domestic flights and most train and metro services. State fuel retailers and refiners Indian Oil Corp, Hindustan Petroleum Corp and Bharat Petroleum Corp operate about 90 percent of retail fuel pumps in India.

 

These companies also buy products from refiners including Reliance Industries, Nayara Energy and Mangalore Refinery and Petrochemicals Ltd to meet local demand. But declining consumption is forcing state refiners, which together own about 60 percent of India's 5 million barrel per day (bpd) refining capacity, to reduce the amount of crude they process as storage facilities fill up with unsold products.

 

Top refiner Indian Oil Corp and its subsidiary Chennai Petroleum has cut refinery runs by an average of 15 percent to 20 percent, sources familiar with the matter said." About 65 percent of the crude is used to produce jet fuel, petrol and diesel ...demand for these products is very low," one said.

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