Indian Oil raises refinery output to over 80% as fuel demand rises
Indian Oil Corp (IOC), the country's largest oil firm, on Wednesday said it has boosted refinery run rates to nearly 83 per cent of the capacity after the demand for fuel almost doubled with the easing of the coronavirus-led lockdown.
The state-run refinery had cut its overall run rate by 25-30 per cent in March to adjust operations due to slump in demand. It began raising throughput in May after some lockdown restrictions were eased.
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"The crude oil throughput of IOC refineries crossed 80 per cent as on date, with consumption of all petroleum products put together almost doubling in May 2020 as compared to April 2020 levels," the company said in a statement.
(Also read: How fuel prices have surged in India in four days)
The company's nine refineries saw throughput gradually being raised from about 55 per cent of rated capacity at the beginning of May to about 78 per cent by the month-end, and 83 per cent as on date, it said.
Capacity utilisation of the refineries had dropped to almost 39 per cent in the beginning of April.
"With Guwahati refinery coming online after maintenance shutdown, IOC refineries are geared to operate at about 90 per cent of their capacities this month, as products demand in the market increases, together with strategic product exports," the statement said.
India on March 25 instituted the world's largest lockdown to combat the novel coronavirus, halting almost all economic activity and throwing traffic off road.
Economic activities, particularly manufacturing, have picked up in the second half of May due to further easing of lockdown restrictions.
"While the consumption of all petroleum products put together almost doubled in May 2020 compared to April 2020 levels, growth of petrol was higher at about 70 per cent and diesel at 59 per cent," IOC said.
Compared to May 2019, or the early months of the current year prior to the lockdown, the growth percentage is yet to catch up by 24 per cent to 26 per cent for all products, it said.
In the case of LPG, with IOC rolling out about 25 lakh cylinder refills a day, the average backlog is less than a day.
"Along with growing consumption of white oils petrol and diesel (except ATF, which is still lagging at about 24 per cent of normal level), the demand for black oils and specialty products like fuel oil, bitumen, pet coke, and sulphur has also shown marked improvement, facilitating the increase of refineries throughput," it said.
IOC said with the gradual lifting in lockdown restrictions, several downstream industries in the petrochemicals sector have resumed operations from late April and product evacuation from refinery stocks has increased gradually.
Its 8,50,000 tonnes-a-year naphtha cracker at the 15 million tonnes-Panipat refinery complex in Haryana is now operating at full capacity, along with downstream units for production of polypropylene (PP), high-density polyethylene, linear low-density polyethylene and ethylene glycol, the company said.
The 7,00,000 tonnes-a-year PP plant at the Paradip refinery has also gone online, while the paraxylene/purified terephthalic acid at Panipat and the 1,20,000 tonnes-linear alkyl benzene unit at Koyali refinery continued to operate during the lockdown.
The company will spend a scheduled ₹26,143 crore for the April 2020-March 2021 fiscal year as work on 250 major projects has restarted.
IOC has resumed work on the Barauni refinery expansion, expansion of the naphtha cracker at Panipat, and several pipeline projects including one connecting the 5 million tonnes-Ennore LNG import terminal to customers.
Work has also resumed on major pipeline projects, including the Paradip-Hyderabad products pipeline; augmentation of Paradip-Haldia-Durgapur LPG pipeline, and its extension to Patna and Muzaffarpur; and the Ennore-Tiruvallur-Bangalore-Pondicherry-Nagapattinam-Madurai-Tuticorin R-LNG pipeline.
Pipeline laying and other activities under city gas distribution resumed in 11 geographical areas, it said, adding that work has also restarted on other projects like grassroots LPG bottling plants, upcountry terminals/depots and additional facilities/tankage at existing bulk storage locations.