Chinese Premier Li Keqiang said…
Soaring prices are weighing on…
Some Indian refiners are being forced to delay maintenance at their facilities because of the surge in Covid-19 cases in the country, which has had refinery workers fleeing to their homes or falling ill.
Bloomberg reports, citing anonymous sources with knowledge of the situation, that Bharat Petroleum and Indian Oil Corp., both refining heavyweights, have deferred their planned shutdowns because of a shortage of workers.
India has been reporting staggering numbers of new daily infections, which on Monday hit a global record of almost 353,000. The country’s hospitals are overwhelmed, and the spread of the infection appears to be impossible to contain.
As a result of these developments, many industries are experiencing a shortage of manpower, Bloomberg writes, adding that migrant workers are leaving the cities for fear of another lockdown, worsening the shortage.
The surge in new Covid cases in India and the grim immediate prospects for the situation has also pressured oil prices. India is one of the world’s largest importers of crude, depending on foreign supplies for over 80 percent of its consumption. Yet, with millions of people falling ill, the outlook for its economy, which was recovering at a pretty decent pace before the wave, has suddenly changed.
Reuters this week quoted consultancy FGE as expecting gasoline demand in India to drop by 100,000 bpd this month and by more than 170,000 bpd in May, with diesel demand falling by as much as 220,000 bpd this month and by 400,000 in May.
Bloomberg reported earlier that India’s consumption of gasoline and diesel combined was expected to drop by 20 percent this month as a result of the surge in infections. This, Bloomberg’s Julian Lee noted, would lead to reduced refinery run rates and a buildup in oil stocks, which will in turn lead to weaker imports going forward, even after the rate of infection slows down.
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.