<article><p class="lead">India's 21-day lockdown that starts today will hit demand for liquid fuels, crimp refinery runs and reduce demand for imported crude, possibly for the next few months. </p><p>India imports 4.7mn b/d of crude, processes 5.3mn b/d in its refineries and sells around 2.5mn b/d of transport fuels.</p><p>IOC, which operates 1.61mn b/d of refinery capacity at 11 plants, has reduced throughput by as much as 30pc in preparation for a potential 10pc fall in fuel demand this month and next. Tanks, pipelines and fuel depots are full — they have a combined capacity of 60 days forward consumption — but there is no demand because retail outlets stocked up on transport fuels anticipating disruption, an IOC official said. </p><p>State-run refiners Hindustan Petroleum and Bharat Petroleum, which predominantly supply the domestic market, are also adjusting runs. Officials say some refineries may reduce throughput to less than 50pc. Private-sector refiners like Reliance Industries, which largely supply export markets, are reducing runs too, industry sources said.</p><p>Lower refinery runs will cut the need for crude imports in April. Industry sources said imports may drop by more than 15pc if runs reduce by 25-30pc. Moreover, there are delays at ports because tankers have to follow a 14-day quarantine. India depends on imports to meet 87pc of its crude needs. Domestic output has been in a long spiral of decline, and the shutdown will further push production below the 600,000 b/d of last month.</p><p>Refiners expect fuel sales to be marginal during the lockdown, which is in place until 14 April. Many north Indian states have banned the use of vehicles and the government has shut airspace except for some cargo aircraft. </p><p>An official from state-controlled IOC, India's largest refiner, said domestic consumption of transport fuels all declined by more than 10pc in the first half of March from a year earlier. The decline in demand may be over 50pc in the second half of March and in April, according to an official from a state-run refiner. In March last year, Indian demand for diesel was at 1.79mn b/d, for gasoline demand was 703,000 b/d, for jet fuel demand was 182,000 b/d and for fuel oil, including marine fuel, demand was 112,000 b/d.</p><p>Nine people have died from the coronavirus India, which has more than 560 confirmed cases, according to the government. The figure is likely to be much higher because of a lack of adequate testing.</p><p class="bylines">By S Dinakar</p></article>
