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India’s refinery capacity utilization picked up in May to an average of 77 percent after the world’s third-largest oil importer started to ease the nationwide lockdown, data from the oil ministry cited by The Economic Times showed.
India’s refinery throughput increased by 11 percent in May compared to April, as all refineries processed a total of 16.34 million tons of crude oil last month, the government figures showed. Compared to May 2019, India’s refinery throughput was down by 24 percent.
Refinery capacity utilization began to rise last month from the lows in April when gasoline and diesel demand in India was said to have crashed by around 60 percent year on year.
In May, India’s fuel demand picked up pace from the April lows, and Indian Oil Corporation (IOC), the country’s biggest refiner and fuel retailer, began to gradually boost operations across its refineries, aiming to raise utilization to 80 percent by the end of May, compared to 45 percent in early April. Indian Oil’s refineries operated at around 60 percent of their design capacities in early May.
According to oil ministry data quoted by The Economic Times, IOC’s nine refineries had an average capacity rate of 72.8 percent in May, up from 53.2 percent during the previous month when the fuel demand was at its lowest.
Private refiner Reliance Industries, which operates the world’s largest refining complex in Jamnagar, however, reduced its capacity utilization for a third consecutive month—to 91.72 percent in May, down from 94.8 percent in April and from 95.4 percent in March, according to The Economic Times.
At the end of May, Indian Oil Minister Dharmendra Pradhan said that the country’s fuel demand was set to reach pre-coronavirus levels this month.
After the easing of the lockdown in India, two-wheelers and small cars will remain an affordable option for maintaining social distancing, thus boosting demand for gasoline, the minister told Times of India. Higher vehicle traffic, farm-sector activities, and the resumption of train service and flights will raise demand for diesel and jet fuel, Pradhan told TOI.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.