Indian refineries are not contracting higher crude oil inventories as demand slows due to short-term winds, such as higher fuel prices and localized blockages, according to S&P Global Platts.
This is happening in the background of the national capital, which was placed under curfew from 22:00 to 05:00 by the end of the month, and Maharashtra and Rajasthan are setting up curbs in an attempt to stop the transmission of coronavirus.
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“Indian refineries are slowing crude exploitation as demand slows and short-term winds lie ahead in the future, including high fuel prices and localized blockades due to growing covid-19 cases,” said Lim Jit Yang, Asia-Pacific Oil Markets Advisor at S&P Global Platts Analytics in a statement on Wednesday.
India, the world’s third-largest oil importer, spent $ 101.4 billion on crude oil imports in 2019-20. And 111.9 billion in 2018-19.
“Platts Analytics expects oil demand in India to remain slightly below 2019 levels in 2021 due to weaknesses in the first half, but will record growth of 440,000 bpd per year, following a fall of 470,000 bpd in 2020. years, “the statement said. .
India is a key refining hub in Asia, with an installed capacity of over 249.36 million tonnes per year (mtpa). It has 23 refineries and plans to increase its processing capacity to 400 mtpa by 2025.
“The average labor rate in all Indian refineries fell to 97% in February from 103% in January, according to data from the Ministry of Petroleum, compared to the labor rate in February 2020 of 111%. For the April-February period, the average screening rate was 88%, compared to the level of 102% a year ago, reflecting the overall impact of the coronavirus blockade, “the statement said.
The cost of the Indian crude oil basket, which consists of crude oil from Oman, Dubai and Brent, amounted to $ 60.93 per barrel on April 7. Following the covid outbreak, crude oil prices in the Indian crude oil basket fell to $ 19.90 in April before recovering to $ 64.73 a barrel in February, according to data from the Oil Planning and Analysis Unit.
“India’s demand for petroleum products fell 4.9% year-on-year in February to 17.2 million mt, or 4.8 million bpd (barrels per day), according to the latest data from the Petroleum Planning and Analysis Unit, which it reflects the weakness in its economy and the fall in higher world crude oil prices, “the statement said.
“Demand for diesel fell 8.5% year-on-year to 6.6 million mt, while demand for petrol fell 3% year-on-year to 2.4 million mt,” the statement added.
It is also happening at a time when U.S. crude oil exports to India jumped to 2.11 million metric tons in February, helping it squeeze out 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 other than the Organization of the Petroleum Exporting Countries (OPEC), following the decision by the Opec-plus group to maintain supply restrictions.
“Overall, Indian refineries processed 18.62 million mt of crude oil in February – an average of 4.87 million bpd – down 11.84% year-on-year. The volume in February was 14.63% lower than the level in January, “the statement said.