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Indian Oil ees low run rates in 2020-2021

August 03/2020

MOSCOW (MRC) -- Indian Oil Corp, the countrys top refiner, will continue to operate its refineries below capacity in 2020/21 as it sees local and overseas fuel demand remaining subdued, reported Reuters with reference to IOC Chairman S. M. Vaidya's statement.

IOC, along with its unit Chennai Petroleum, controls about a third of Indias five million-barrels-per-day (bpd) refining capacity.

Vaidya said refinery runs have declined to about 75% from 93% in early July on low fuel demand.

He said the operations are expected to remain at 70%-75% for the remainder of the fiscal year through March 2021.

It is very difficult to predict... We dont expect demand to recover to pre-COVID levels in the near future, he said, adding the company could raise refinery runs to 90% if demand recovers.

Indian refiners are cutting crude processing and shutting units for maintenance as local fuel demand falls and global refining margins are weak, company officials said.

Vaidya said IOC has shut its 300,000 bpd Pardip refinery on the east coast for maintenance and has plans to shut some units its 274,000-bpd Koyali refinery in the west for repairs this fiscal year.

Indian refiners are also reducing run rates as the export market is not attractive and rising fuel exports from China are likely to increase the pressure on Asian refining margins.

On Friday IOC reported a 47% decline in its June quarter profit as lockdowns hammered fuel demand and squeezed its refining margins to minus $1.98 per barrel.

Vaidya hoped oil prices would stay at around $40 per barrel in the second half of 2020. He also said to boost revenue IOC would look at maximising petrochemicals production at its refineries.

As MRC wrote before, Indian Oil Corporation Ltd (IOCL) was in plans to undertake a planned shutdown at its polypropylene (PP) plant in Paradip last weekend. The plant is expected to remain under maintenance for about two weeks. Located at Paradip in the India state of Odisha, the PP plant comprises of two lines with a production capacity of 340,000 mt/year each.

We remind that Indian Oil Corp restarted operation at its naphtha cracker in India in early-October, 2019, after completing maintenance works. The cracker was shut in early-September, 2019 for a maintenance turnaround. Located in Panipat, in the northern Indian state of Haryana, the cracker has an ethylene production capacity of 857,000 mt/year and propylene capacity of 425,000 mt/year.

According to MRC's DataScope report, PP imports into Russia rose in the first six months of 2020 by 21% year on year to 105,300 tonnes. Propylene homopolymer (homopolymer PP) accounted for the main increase in imports.

Indian Oil Corporation Limited, or IndianOil, is an Indian state-owned oil and gas corporation with its headquarters in New Delhi, India.
Author:Margaret Volkova
Tags:PP, PE, crude and gaz condensate, homopolymer PP, propylene, HDPE, ethylene, petrochemistry, Indian Oil Corp, India, Russia.
Category:General News
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