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IOC, HPCL reduce refinery throughput by up to 30%, BPCL to follow

Vikas Srivastava
IOC, HPCL, BPCL, coronavirus outbreak, avaition turbine fuel, crude oil, country wide lockdown, oil marketring companies

Following the outbreak of Covid-19 and the subsequent lockdown since March 22, the country's oil marketing companies (OMC) have seen significant drop in the demand for diesel, petrol and aviation turbine fuel (ATF), which has led to reduction in the production of these refined products by up to 30%.

Indian Oil Corporation (IOC) has cut its refined throughput by 25-30% as the demand for petroleum products like petrol, diesel, fuel oil, bitumen, etc fell substantially. The demand for ATF has also come down sharply due to suspension of flights.

"Keeping this in view, Indian Oil has regulated crude oil throughput at most of its refineries by 25% to 30%. Upliftment of finished products from them in the last one week has helped upcountry bulk storage locations of the Corporation build up their stocks for future-readiness once the countrywide lockdown is lifted and the demand picks up again. The Corporation is keeping a close watch on global cues and the changing market scenario and initiating actions accordingly," IOC said in a statement.

Hindustan Petroleum Corporation (HPCL) chairman & managing director MK Surana told FE that in view of the countrywide lockdown due to coronavirus, the offtake of products like motor spirit, high-speed diesel, bitumen and ATF is reducing, which will require regulation on refinery throughput to avoid storage problems. "As of now, Visakhapatnam refinery is running on full throughput, while Mumbai refinery throughput is regulated to about 80%," Surana said.

R Ramachandran, director refineries at Bharat Petroleum (BPCL), told FE the company will look at reducing the throughput by this weekend as the demand scenario is not good enough to sustain the current production levels. "The demand for ATF is almost zero, diesel demand is down by around 25-30%, while gasoline was positive due to last minute stacking up. This will also go into negative by weekend. We will have to rationalise our throughput by the weekend," Ramachandran said.

IOC's total throughput in the December quarter of 2019 was around 17 million tonne, which will be regulated by 30%. BPCL produced around 9.81 million tonne, while HPCL produced around 4.16 million tonne in the December quarter.

However, in the midst of reduction in demand for major petro products, there has been an increase in demand for LPG cooking gas. To meet the rising demand for LPG, Indian Oil is taking steps to increase LPG production in its major refineries by optimising operations, improving LPG yield in LPG producing units like FCC/Indmax, etc. Bottling plant operations and LPG refill deliveries are being streamlined accordingly. "Adequate stocks are available and there is no need for panic-booking by LPG customers," IOC said.

Indian Oil is also ensuring emergency fuelling across all permitted modes. The Corporation's bulk storage installations, LPG-bottling plants, fuel stations and LPG distributorships have been advised to operate under the advisory of their respective state governments and local administrations to maintain essential services in their geographies.