Utilisation levels had increased to 89% in June, but fell to 61% and 77% respectively in August and September.
With rising consumption of petroleum products, state-run refiner Indian Oil Corporation (IOCL) ramped up the utilisation of its refineries to 100% of their design capacities in November. In the beginning of the lockdown to contain the coronavirus outbreak in March, IOCL had regulated crude oil through put at most of its refineries by 25% to 30%. The company had kept all its refinery units on ‘hot standby’, which means the units were ready for scale-up whenever petrol and diesel demand picks up.
Utilisation levels had increased to 89% in June, but fell to 61% and 77% respectively in August and September as some states resorted to implementing sporadic local lockdowns. The run rate was 89% at October-end. “As we get closer to the Covid-19 vaccine roll-out, the fundamentals of the economy being strong, we see a rapid V-shaped recovery in the overall consumption of petroleum products,” SM Vaidya, chairman, IOCL said.
Rise in refinery utilisation also coincides with increasing gross refining margins (GRMs) of Indian refiners, as they continue to benefit from the low crude price environment globally. While IOCL’s GRM in FY20, on a weighted average basis, was only $0.08/barrel in FY20, the same grew to $3.46/barrel in April-September period. The total refining capacity of the country is 249.9 MT per annum, and of this 69.7 MTPA is run by IOCL.
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