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Essar Oil’s fuel exports to fall in 2018/19 as focus shifts to local sales
Indian refiner Essar Oil’s fuel exports will sharply drop in 2018/19 as it ramps up local sales by doubling its retail network and turns some of its naphtha into profitable gasoline, its managing director said. Rising fuel demand, driven by India’s thirst for gasoline, is expected to help push the growth rate in the country’s fuel consumption ahead of China’s.
Essar Oil, which operates the 400,000 barrels per day Vadinar refinery in western Gujarat state, directly sells gasoil and gasoline in the retail market through 2,470 fuel stations and exports about 45 percent of its refined fuels output. It plans to increase its retail sales outlets to 4,300 this fiscal year and to over 5,000 the next year, L.K. Gupta told reporters on Saturday, adding higher local sales would shrink Essar’s export to 25 percent.
“All along, we were a country where people were aspiring for a bicycle and now we want at least two-wheelers (motorcycles and scooters)…65 percent of gasoline demand is from two-wheelers,” Gupta said. He said Essar is investing about $200 million to raise output capacity of its naphtha hydrotreater, continuous catalytic reformer and isomerisation units by 15-20 percent and set up new units to recover sulphur and manufacture propylene.
These projects, to be completed by March 2018, will boost Essar’s profit from turning crude into refined fuels by $0.90 per barrel, Gupta said. Expansion of units would halve Essar’s naphtha exports to one cargo a month and raise annual gasoline output by 10-15 percent from the current 3-3.5 million tons, he said. Erik Gudbranson Womens Jersey
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