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Low Diesel Demand hits BPCL’s Crude Runs, Ups Petrol Imports

29 Sep 2020 11:34 am
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Mumbai Commodities Control - Indian refiner Bharat Petroleum Corp Ltd (BPCL) will continue to import gasoline for the next few months as its crude processing is hit due to lower demand for diesel that accounts for 40 per cent-45 per cent of its product slate, its head of marketing AK Singh said.

BPCL is operating refineries at an average of 80 per cent capacity, Singh told a press conference. By design, BPCL refineries make 2.5 tonnes of diesel for every one tonne of gasoline produced, he said.

“If diesel demand picks up we will not be required to import gasoline as then we will be processing more crude ... diesel is restraining crude throughput ... MS (motor spirit) is almost at a pre-pandemic level. Diesel is lagging,” he said.

Asia’s gasoline refining margin surged to a 6-1/2 month high on Monday as supplies tightened, industry sources said. India's recent spot demand also provided support to the Asian gasoline market.

India’s gasoline demand in September recovered to last year’s level as passenger cars sales surged last month and motorists are relying on personal vehicles for commuting amid rising cases of coronavirus.

Slowing industrial activity has delayed a recovery in diesel consumption, largely used by commercial vehicles. Diesel demand this month is 8 per cent-9 per cent lower than year-ago levels, he said.

Singh hoped India’s diesel sales would recover next month during the festival season.

BPCL will completely stop importing gasoline from April next year when it would start new units at its Kochi refinery to upgrade naphtha into gasoline, he added.

He hoped BPCL will go back to its pre-Covid-19 product slate in the next two-three months, notwithstanding lower demand of jet fuel which is just 4 per cent-5 percent of its overall output, he said.

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