<article><p class="lead">India's biggest refiner state-controlled IOC is operating at near full capacity despite the country's worsening Covid-19 outbreak but may have to cut runs by at least 10pc next month if lockdowns continue.</p><p>India's fuel demand has slipped after lockdowns were reimposed across parts of the country to combat a surge in Covid-19 cases. But refiners have largely maintained run rates because they have enough storage capacity to absorb their products output, company officials said.</p><p>IOC is operating its refineries at around 99pc today and plans to keep output steady for a week, a company official said. Storage is available at refineries and depots, and a decision on trimming runs will only be taken after observing the demand situation at the end of this month. IOC operates close to 1.6mn b/d in refining capacity or around a third of the country's capacity. </p><p>But smaller state-controlled refiners Bharat Petroleum (BPCL) and Hindustan Petroleum (HPCL) are adjusting runs at their refineries in Mumbai because of restrictions in Maharashtra state, although the extent of the cuts is unclear. "We are not seeing a big drop in demand but there is some effect on transport fuels because of lower use of personal vehicles, and closures of malls and markets," said an official from a state-controlled refiner. BPCL and HPCL operate 240,000 b/d and 150,000 b/d refineries in Mumbai respectively.</p><p>Private-sector Reliance Industries is operating its two plants with combined processing capacity of 1.36mn b/d in Jamnagar on the west coast at normal capacity, according to a company official.</p><p>IOC, BPCL and HPCL may need to start cutting runs by at least 10pc if the lockdowns in Delhi and Mumbai continue in May, industry officials said. The two cities are India's biggest transport fuel markets. Run cuts would weigh on crude imports, which declined on the month in February, according to the latest official data.</p><p>Covid-19 cases are surging in India, without any concerted national action plan to address the increase. The government said it will open up vaccinations to anyone aged 18 and above from 1 May but faces a tough task providing vaccines for nearly a billion eligible people.</p><p>State-controlled MRPL, which operates a 300,000 b/d refinery in Mangalore, has received no official notification to cut runs, a company official said. But another MRPL employee and a market participant said the company was operating at just 70pc, possibly because of an unplanned shutdown at one of its crude distillation units, although this could not be confirmed.</p><p>India is the world's second most infected nation behind the US, with over 15mn cases. The number of new Covid infections declined slightly to around 260,000 in the last 24 hours from a record 274,000 a day earlier, but is still up more than twentyfold from February.</p><p>India's diesel and gasoline demand fell by 3pc and 5pc respectively in the first half of April from a month earlier. Diesel use fell to 1.38mn b/d, while demand for gasoline dropped to 561,000 b/d, according to data from state-controlled refiners that cover around 90pc of the market.</p><p class="bylines">By S Dinakar</p></article>
