Indian state refiners lift runs on robust demand view

India's state-controlled refiners have increased refinery runs this month, market participants close to the refiners told Argus, as motor fuel demand is anticipated to increase this quarter.

The country's biggest refiner by capacity state-owned IOC has been operating its refineries at about 85pc capacity, with this likely to increase to about 90pc in the second half of this month and surpass 95pc next month.

The refiner is also rescheduling a planned turnaround at its 161,000 b/d Haldia refinery to the second half of November, while repairs at its 120,000 b/d Barauni refinery are ongoing following a furnace explosion last month.

Fellow state-run refiners Hindustan Petroleum (HPCL) and MRPL are operating their refineries at maximum capacity this month, market participants said. MRPL operates a 300,000 b/d refinery in Mangalore.

HPCL's Mumbai refinery was shut down earlier in the year for a turnaround and capacity expansion to 190,000 b/d from 150,000 b/d and is "fully on stream now", a market participant said, adding that its 166,000 b/d Visakhapatnam (Vizag) refinery is also operating at full capacity following a fire at its 70,000 b/d crude distillation unit earlier in the year.

State-owned Bharat Petroleum BPCL is operating its 310,000 b/d plant in Kochi and 156,000 b/d refinery in Bina at maximum capacity, while runs at its 240,000 b/d refinery in Mumbai are being ramped up to 100pc following a turnaround last month.

India's gasoline demand reached 732,000 b/d in September, rising by around 10pc from the same period in pre-pandemic 2019. Diesel consumption of 1.37mn b/d was down by 5.6pc from September 2019 but rose by 1.6pc on the month, indicating that demand is starting to pick up despite record-high retail prices.

Indian refiners and analysts expect diesel consumption to increase this quarter amid the festival season, while rising use of personal transport on the back of fears of a third wave of Covid-19 is likely to support gasoline consumption.

By Sathya Narayanan