Indian oil demand holds steady in July: BPCL

Indian fuel demand has held steady in July despite a prolonged lockdown to combat the country's Covid-19 outbreak, according to R Ramachandran, refineries director at state-controlled refiner Bharat Petroleum (BPCL).

Total fuel consumption this month is in line with June despite localised lockdowns and a seasonal decline in transport fuel demand during the July-September monsoon, Ramachandran said. Monsoon rains are affecting demand for transport fuels as fewer people move around but other fuels are doing well, he said, without giving details.

Data from state-controlled refiners released earlier this month indicated that India's demand recovery had stalled in the first half of July.

BPCL will receive its full quota of term crude from the Middle East in August and is expecting similar pricing to July.

BPCL's refineries are operating at an average of 70pc of capacity. The company is still running through its oil product stocks at depots and refineries to supply its retail outlets, and does not plan to step up throughputs.

The refiner will adapt a demand-led output strategy at its plants rather than just ramping up throughput, Ramachandran said. That means runs will correlate to consumption.

The company's 240,000 b/d Mumbai refinery is operating at 100pc, while the 156,000 b/d Bina refinery in central India is running at 80pc after it emerged from a total shutdown earlier this month. The 310,000 b/d Kochi refinery is operating at just 35pc because of a shutdown at a 200,000 b/d crude distillation unit. BPCL operates over 16,000 retail outlets, which account for 24pc of the country's retail network, and 61 jet fuel outlets.

India consumed 1.57mn b/d of diesel, 642,000 b/d of gasoline, 58,000 b/d of jet fuel and 2.076mn t of LPG in June, according to oil ministry figures, which include sales by private-sector firms.

India issues a preliminary demand report on the first of each month for sales generated by state-controlled refiners, accounting for 90pc of the country's fuel use, and an industry-wide report in the second week of the month.

Many Indian states have imposed stringent lockdowns, slowing economic activity and hurting fuel demand. India's Covid-19 case count is rising by around 50,000 each day and is nearing 1.5mn. A federal lockdown is due to end on 31 July.

By S Dinakar