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India IOC raises refining runs
10/30/2020 12:00:00 AM

Indian state-controlled refiner IOC has increased refining runs in line with a recovery in fuel demand to 94pc from 77pc in September. It expects to fully utilise its refineries in a couple of months, according to company chairman Shrikant Madhav Vaidya.

Runs at IOC's refineries averaged as low as 49pc in April after India implemented a national Covid-19 lockdown. IOC said in mid-October that expected runs to be at 100pc by March. This target will now be achieved by December if demand continues to grow at current rates.
Demand for gasoline by the end of October had recovered to pre-Covid-19 levels and exceeded last year's levels by 2pc, while diesel sales are still lower by 2.6pc, IOC said. But jet fuel sales are down by as much as 50pc.
IOC has approved expanding the Koyali refinery in Gujarat state on the west coast to 360,000 b/d from around 274,000 b/d. It will consider further expansion at the 300,000 b/d Paradip and 300,000 b/d Panipat refineries after studying the demand scenario, Vaidya said.
The company's gross refining margin for the July-September quarter rose to $8.60/bl from around $1.30/bl a year earlier, on account of 74bn rupees ($1bn) in inventory gains on crude and oil products compared with inventory losses of around Rs18bn a year earlier.
The company is not considering any new projects. India's prime minister Narendra Modi has set a target for India to add 3mn b/d of capacity to the existing 5mn b/d by 2025. IOC has spent around Rs90bn until now on projects compared with a Rs262.2bn capital expenditure budget in the 2020-March 2021 fiscal year.
IOC's strategy mirrors that of fellow state-controlled refiner Bharat Petroleum, which earlier today said that expansion and throughput will be in line with demand.
Indian refinery throughput fell last month by 8.6pc from a year earlier, a smaller drop than the 27pc in August after India relaxed Covid-19 restrictions on economic activity. Crude runs fell to 4.33mn b/d last month from 4.74mn b/d a year earlier and from a targeted 5.07mn b/d, according to preliminary oil ministry data.
Source: Argus