Public sector refiner Bharat Petroleum Corporation (BPCL) is looking for long-term contracts for diesel as the domestic diesel market in India has turned negative in the last couple of quarters. The company already exported around 200,000 tonne of diesel in September quarter.
N Vijayagopal, director finance of BPCL, said that the company is looking at signing long term-contracts to export diesel in foreign markets. "We have already started exporting diesel to the traders in Singapore and looking at other markets as well," Vijayagopal said.
The domestic diesel market, a key petroleum product used widely in the hinterland and supported by government subsidies, shrunk by 2.5% in the September quarter largely led by extended rains, people waiting to convert their vehicle to BSVI etc. BPCL's diesel sales fell by 2.4%, while petrol sales rose 6.7% in September quarter. "In October, we expected diesel sales to pick up because of the festive season but growth was negative again. We don't anticipate that diesel sales will pick up overnight," Vijayagopal said.
"The company plans to export around 30,000 metric tonne to 40,000 metric tonne per month from each refinery, which would be close to 120,000 metric tonne per quarter. We are evaluating the economic situation as of now and will wait for next couple of quarters before we go ahead with the term contracts," another official with BPCL told FE on conditions of anonymity.
"There are lot of traders available in the market who are willing to buy higher flash products as they use blending components to upgrade their production. Also, the general use of diesel across transportation sector in the country appears to be reducing. It is the sign of general slowdown in the economy," the official said.
BPCL on Thursday reported a net profit of Rs 1,709 crore in the September quarter, up 40% from the year-ago period. The gross refining margins (GRMs) stood at $3.38 per barrel, compared to $5.57 a barrel in the year-ago period. Total revenue decreased from Rs 82,924 crore to Rs 75,056 crore even as operating profit rose to Rs 3,246 crore in the September quarter.