Indian refineries are not contracting higher crude supplies as demand slows on account of near-term headwinds such as higher fuel prices and localized lockdowns, according to S&P Global Platts.
This comes against the backdrop of the national capital being placed under a 10pm-5am daily curfew until the end of the month and Maharashtra and Rajasthan putting curbs in place in an attempt to contain coronavirus transmission.
“Indian refiners are holding back crude runs as demand slows, with headwinds ahead in the near term, including high fuel prices and localized lockdowns due to rising cases of covid-19,” said Lim Jit Yang, adviser for Asia-Pacific oil markets at S&P Global Platts Analytics in a statement on Wednesday.
India, the world’s third-largest oil importer, spent $101.4 billion on crude oil imports in 2019-20 and $111.9 billion in 2018-19.
“Platts Analytics expects India’s oil demand in 2021 to remain slightly below the 2019 level due to weakness in the first half but will register a growth of 440,000 b/d on the year, after declining 470,000 b/d in 2020,” the statement said.
India is a key refining hub in Asia, with an installed capacity of over 249.36 million tonnes per annum (mtpa). It has 23 refineries and plans to grow its refining capacity to 400 mtpa by 2025.
“Average run rate at all Indian refineries slipped to 97% in February from 103% in January, oil ministry data showed, compared with the February 2020 run rate of 111%.