According to S&P Global Platts, Indian refineries are not cutting higher oil supplies as demand slows due to short-term impediments such as higher fuel prices and local restrictions.
This comes against the backdrop of the country’s capital having a daily curfew from 22:00 to 5:00 until the end of the month, and Maharashtra and Rajasthan are imposing restrictions in an attempt to curb the transmission of coronavirus.
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“Indian refiners are holding back oil production growth due to slowing demand, and headwinds are expected in the near future, including high fuel prices and local restrictions due to rising cases of COVID-19,” said Lim Jeet Yan. , Asia-Pacific oil advisor to S&P Global Platts Analytics in a statement Wednesday.
India, the world’s third largest oil importer, spent $ 101.4 billion on crude oil imports in 2019-2020 and $ 111.9 billion in 2018-19.
“Platts Analytics expects oil demand in India in 2021 to remain slightly below 2019 levels due to weakness in the first half, but will record 440,000 bpd growth year-on-year after a 470,000 bpd decline in 2020 year, ”the statement reads. …
India is a key processing center in Asia with an installed capacity of over 249.36 Mtpa (Mtpa). It has 23 refineries and plans to increase its refining capacity to 400 million tons per year by 2025.
Average utilization across all Indian refineries fell to 97% in February from 103% in January, oil ministry data showed, compared to 111% in February 2020. Between April and February, the average execution rate was 88%, up from 102% a year earlier, reflecting the overall impact of blocking the coronavirus, ”the statement said.
The price of the Indian basket of crude oil, which includes oil from Oman, Dubai and Brent, was $ 60.93 a barrel on April 7. Following the coronavirus outbreak, crude oil prices for the Indian basket fell to $ 19.90 in April and then recovered to $ 64.73 a barrel in February, data from the Oil Planning and Analysis Division showed.
“Demand for refined products in India in February fell 4.9% year-on-year to 17.2 million tonnes, or 4.8 million barrels per day (barrels per day),” the latest data from the Planning and Analysis Department showed. oil, reflecting the weakness of the country’s economy and its consequences. on the rise in world oil prices, “- said in the message.
“Diesel fuel demand fell 8.5% year on year to 6.6 million tonnes, while gasoline demand fell 3% year on year to 2.4 million tonnes in the same month,” it said. message.
It also comes at a time when US crude oil exports to India jumped to 2.11 million metric tons in February, helping it oust Saudi Arabia as India’s second largest supplier. The Indian government is working to diversify the country’s energy basket by supplying crude oil from sources outside the Organization of the Petroleum Exporting Countries (OPEC) after the OPEC-plus group decided to maintain supply restrictions.
“In general, Indian refiners processed 18.62 million tons of crude oil in February – an average of 4.87 million barrels per day, which is 11.84% less than a year earlier. The February volume was 14.63% lower than the January level, ”the message says.