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India’s IOC ramps up runs faster than expected
India’s biggest refiner state-controlled IOC has boosted capacity utilisation to 74pc from 60pc last week, raising rates more quickly than had been expected after lockdown relaxations increased fuel demand.
The company said on 11 May that it plans to boost runs to 80pc by the end of May but may achieve the target this week, an IOC official said. IOC processed 1.56mn b/d of crude across its 10 refineries in March.
Higher throughputs will help to restore purchases of term crude from the Middle East in June, after Indian refiners halved imports in May. They may take 50-70pc of their committed term crude volumes next month. IOC is also boosting runs at its naphtha cracker and MEG plant at its 300,000 b/d Panipat refinery in northern India because of stronger demand for chemicals.
India’s fuel demand will reach 80pc of usual levels by the end of May, oil minister Dharmendra Pradhan said. Over 80pc of India’s agricultural markets have reopened, from fewer than half early last month, and this has bolstered diesel sales. Gasoline demand averaged 746,000 b/d in May 2019 and diesel use averaged 1.87mn b/d, according to the oil ministry.
India extended a nationwide lockdown by two weeks to 31 May but offered several relaxations to factories, agriculture services and offices. Easing restrictions amid a surge in Covid-19 cases will further encourage transmission of the virus, according to medical experts. There have been over 101,000 cases in India so far. State governments are prioritising revenues because the extended lockdown has drained finances and consumption, leaving over a hundred million people unemployed.
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