OPEC’s Smallest Producer Sees Crude Oil Exports Drop To Zero
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Monsoon torrents and regional civil disturbances did not affect India’s hunger for fuels last month, with local refineries processing 4.82 million barrels per day, up 9.27 percent on the year, according to preliminary government data cited by Reuters.
The increase highlights India’s booming fuel demand as well as efforts from state-owned downstream majors to satisfy it, yet the country still relies on imports for 80 percent of its fuel demand. This puts it at a disadvantage to other huge consumers, as its local crude oil production is disproportionately small, at 712,800 bpd in September, down 4.09 percent on the year.
Asia’s fastest-growing economy took a breather in September, as fuel demand declined by 0.8 percent on the year to 3.82 million bpd due to heavy rains and what Platts called “regional unrest,” regarding water-sharing rights in two states in southern India, Karnataka and Tamil Nadu. However, the decline – the first monthly decline in fuel demand in two years – is bound to be temporary, according to analysts, and gasoline and diesel fuel will soon be back on the upward curve.
A month earlier, in August, fuel demand in India jumped by 11 percent on an annual basis to 4 million bpd, Platts recalls. India’s refiners have been finding it hard to respond to the fast-growing demand for their produce, and this led India Oil Corporation to warn that unless they find a quick solution to a shortage in refining capacity, the country will be forced to up its fuel exports.
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The current capacity of Indian refineries is 4.62 million bpd, which is planned to be raised to more than 6 million bpd, which will not be enough, according to the company. At the same time, however, foreign oil producers are taking considerable interest in the Indian downstream industry.
The latest in this respect was Rosneft’s acquisition of a 49-percent stake in Essar Oil’s Vadinar refinery. Essar Oil is one of the biggest players in Indian oil refining, and the Vadinar refinery is the second-largest in the country. For the deal, Rosneft partnered with Swiss Trafigura and a Russia-based investment fund, who will split another 49 percent in the business.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.