Economy

Oil refiners cut output, imports as pandemic hits fuel demand

India’s top oil refiners are reducing processing runs and crude imports as the surging COVID-19 pandemic has cut fuel consumption, leading to higher product stockpiles at the plants, company officials told Reuters on Tuesday.

Indian Oil Corp., the country’s biggest refiner, has reduced runs to an average of between 85% and 88% of processing capacity, a company official said, adding runs could be cut further as some plants are facing problems storing oil products.

IOC’s refineries were operating at about 95% of their capacity in late April.

“We do not anticipate that our crude processing would be reduced to last year’s level of 65%-70% as inter-State vehicle movement is still there ... (the) economy is functioning,” he said.

Several States across India are under lockdown as the COVID-19 crisis showed scant sign of easing on Tuesday, with a seven-day average of new cases at a record high, although the government of India, the world’s third-largest oil importer and consumer, has not implemented a full lockdown.

State-run Bharat Petroleum Corp. has cut crude imports by 1 million barrels in May and will pare purchases by 2 million barrels in June, a company official said.

‘Not as severe’

M.K. Surana, Chairman of Hindustan Petroleum Corp., expects India’s fuel consumption in May to fall by 5% from April as the impact on driving and industrial production is not as severe as last year. “This time it is not a full lockdown like last time,” he said.

“Sales in April was about 90% of March and we expect May could be about 5% lower than April.”


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Printable version | Jun 24, 2021 3:01:42 AM | https://www.thehindu.com/business/Economy/oil-refiners-cut-output-imports-as-pandemic-hits-fuel-demand/article34538230.ece

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