Indian state refineries maintain maximum runs in June

Most Indian state-controlled refineries operated at maximum nameplate capacity or higher in June because of robust transport fuel demand and firm middle distillates crack spreads.

MRPL operated its 300,000 b/d refinery in Mangalore at more than 110pc of nameplate capacity, while Hindustan Petroleum's 190,000 b/d Mumbai and 166,000 b/d Visakhapatnam refineries were running at maximum levels last month, market participants close to the refiners said.

India's largest state-controlled refiner by capacity IOC followed the trend, despite a small pause earlier in the month. Its refinery utilisation rate was 100pc at the end of June. But an unexpected shutdown of a fluid catalytic cracker at its 300,000 b/d Paradip refinery on 13 June weighed on its runs for a short period. The unit was restarted around 19-20 June, while the refinery is scheduled to have a maintenance shutdown in August.

Bharat Petroleum (BPCL) bucked the trend because of planned maintenance of some units at its 240,000 b/d Mumbai refinery. Mumbai operated at about 68pc of nameplate capacity and is expected to return to normal levels next week, participants said.

BPCL's 310,000 b/d Kochi refinery is likely to have a planned partial turnaround in September. It operated at maximum runs in June, along with the 156,000 b/d Bina refinery.

Indian state-controlled refineries maintained high operating rates amid robust transport fuel demand and likely fuel shortages in the country. The government gave assurances that the country had enough stocks to meet peak demand, although the transport industry group representing bus and truck drivers took an opposite view.

India's diesel and gasoline consumption in June increased by 12pc and 3pc respectively from a month earlier, according to preliminary data from the state-controlled refiners that control around 90pc of the country's fuel market. Jet fuel demand was up by 2pc from May and more than double from a Covid-19 affected June 2021.

Refiners typically maximise their runs to cash in on firmer margins. Asian gasoil margins — or the Argus' assessed Singapore 10ppm (0.001pc) sulphur gasoil swaps to Dubai crude — are still around multi-year highs at above $50/bl, even though this has fallen from its record high of over $70/bl last month. Gasoil margins averaged around $59.52/bl in June, up from May's average of $39.75/bl.

By Sathya Narayanan and Cara Wong