India exported less naphtha in March this year compared to the same period over the last three years, according to latest oil ministry data.
India's naphtha exports rose by 11pc on the month to 146,700 b/d in March, but were lower by 35pc compared to 227,100 b/d a year earlier, down by 34pc from 223,000 b/d in 2021 and by 38pc from 235,500 b/d during March 2020.
Naphtha exports fell on the year despite most state-controlled and private-sector refiners running at maximum capacities in March and April. India's refineries have been operating at maximum capacity owing to strong domestic demand and cheaper feedstock, market participants said. Indian state-owned and private-sector refiners processed 23mn t (5.5mn b/d) of crude oil in March, the highest levels since records began in 2010.
The reduction in naphtha exports came also despite a seasonal spike in overseas supplies in March, which marks the end of the fiscal year for Indian companies, with refineries usually offering more cargoes for export to clear inventories.
But naphtha exports could have slipped this year also as most refiners pulled more naphtha into the gasoline blending pool to meet strong domestic gasoline demand and capitalise on firm gasoline export margins, market participants said. The reforming spread, or the Argus fob Singapore 92R gasoline price premium to the Argus fob Singapore naphtha price, rose to a seven-month high of $28.70/bl on 3 April because of firmer gasoline margins, although it has since narrowed to $21.40/bl as of 26 April. A reforming spread of around $8/bl is typically enough to make blending attractive for gasoline blenders.
Indian gasoline exports rose by 6.5pc on the month in March to the highest level since March 2022, given record gasoline production volumes and stock clearing during India's financial year-end. Exports rose to 400,700 b/d in March 2023, as the country produced 4.05mn t (1.1mn b/d) of gasoline, the highest level since the government began to publish records in April 2010.
Indian refiners are maximising transportation fuel production and pushing naphtha into the blending pool as naphtha margins are weak, an India-based gasoline trader said. Refinery runs are also higher, the trader added. India's naphtha production had slipped to 427,000 b/d in March, down by 17pc from a year earlier.
