• BPCL plans to maintain high refinery run rates

    India’s state-controlled refiner Bharat Petroleum (BPCL) plans to keep its run rates at capacity to meet increased domestic oil products’ demand, the company’s general manager of crude trading, Shelly Abraham told Argus in an interview.

    “BPCL refineries are all running at slightly over 100pc of capacity. We started increasing run rates around the middle of November, and in December and January we are still running above 100pc. We expect to continue at this level for the next few months,” Abraham said.

    “Around October-early November, we were operating at 70-80pc of capacity. And in April-May, during the low demand period, we were running as low as around 50pc of capacity.” Indian refiners boosted throughput of crude by around 1pc in December from a year earlier as demand for some oil products returned to pre-pandemic levels. India’s crude runs rose by 1pc to 4.97mn b/d in December from 4.93mn b/d a year earlier but fell from 5.08mn b/d in November, according to preliminary oil ministry data.

    India’s crude imports also rebounded in December from a year earlier, rising by more than 3.5pc as refinery runs increased, after falling on the year for eight straight months. BPCL has increased its purchases of light sweet crude over the past year, to take advantage of the narrower price premium of lighter, sweeter crudes relative to the heavier sour grades.

    “Almost all Indian refineries are designed to run mainly heavy, high-sulphur crude, but recently we have seen more light sweet crudes coming into the market and in terms of the price, the spread between light crudes and heavy crudes has narrowed significantly, and inverted in some cases. Ultimately, refineries go by the valuation and margins, so the percentage of light sweet crudes in our BPCL system has increased,” Abraham said.

    “In general, in the last year or so, our intake of light, low-sulphur crude has gone up by maybe 15-20pc from earlier levels. This would include US WTI, west African crudes and Mediterranean grades like Azeri and Saharan Blend. If tomorrow the price spread of light crudes to heavy goes back to previous wide levels, we are ready to buy and process more of the heavier grades,” he said.

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