State-run refineries in India operate at full capacity in March

The country’s biggest state-run refiner in terms of capacity, IOC, and fellow refiner MRPL’s 300,000 b/d Mangalore refinery were operating at 100% or higher than their nameplate capacities. The two refiners have deferred some upcoming maintenance shutdowns because of current strong refining margins.

BPCL’s 310,000 b/d Kochi, 240,000 b/d Mumbai and 156,000 b/d Bina refineries were also operating at maximum or higher than their nameplate capacities. But there was a brief hiatus earlier in the month at the Mumbai refinery after a power grid failure resulted in a DHDS unit shutdown, which market participants said has been resolved.

The power blip also affected HPCL’s 190,000 b/d Mumbai plant, which is still regulating crude intake but is expected to operate normally by the end of the month. The state-refiner’s 166,000 b/d Visakhapatnam (Vizag) refinery was operating normally at maximum capacity.

India’s consumption of transport fuel increased in February as most businesses resumed operations after the government eased restrictions on mobility and travel.

Average driving activity across India so far this month has been 138% above a 13 January 2020 baseline, according to data from US technology firm Apple. That compared with average activity of 129% above the same baseline in February, indicating that mobility is improving.

Domestic airport footfall has averaged about 690,000/d so far this month compared with 531,000/d last month, according to Argus estimates based on daily traffic data published by India’s civil aviation ministry. This data acts as a proxy for jet fuel demand.

Asian gasoline margins — Argus’ 92R gasoline spot assessments against Ice Brent — have averaged $14.91/bl in March so far, compared with $5.64/bl in February 2021 and $13.45/bl last month.

Asian gasoil margins — Argus-assessed Singapore 10ppm sulphur gasoil swaps against Dubai crude values — have averaged $27.76/bl so far this month, compared with $6.07/bl in February 2021 and $17.81/bl last month.

Firm fuel demand outlook and product crack spreads have largely pushed refiners to operate refineries at maximum levels despite the volatility in crude prices. Higher product margins usually encourage higher exports.

Source: ArgusMedia