Indian diesel imports intensify, could slow during monsoons
The Dollar Business Bureau
Diesel imports of India have increased with state-run oil refiner Hindustan Petroleum Corp (HPCL) on Tuesday entering the crude spot market for seeking its seventh consignment of the fuel for the month of July, according to trade sources.
However, imports of the fuel could be slowed down as monsoon season begins in India, the sources told a leading international news agency.
The state-owned refiner is seeking delivery of 60,000 tonnes of 40 ppm sulphur gasoil into Vizag during July 20-25 in a tender which ends on July 5.
This is HPCL’s seventh consignment requirement for the month of July, however, it was not clear if all the earlier tenders have been given.
HPCL-Mittal Energy Ltd (HMEL) was likely to begin its 230,000 barrels a day refinery at Bathinda in Punjab after it was shut down for maintenance in April, but it is not yet back to operations, said an industry source.
The diesel demand in India has been strong in spite of starting of the monsoon season because of various power outages that has driven the diesel demand for use in back-up power generators, said the source.
The monsoon season is still in early days. Once the monsoon intensifies, the fuel demand in agriculture sector could be slowed down, added the source.
The country has the capacity to refine crude oil and to produce fuel in surplus of the demand compared to the 230.1 million tonnes of installed refining capacity. The overall fuel demand was 184.7 million tonnes in 2015-16.
In the period April-January 2016-17, the demand for fuel stood at 161.4 million tonnes whereas the refineries are producing around 202 million tonnes of fuel.
On the other hand, the country is 80% depends on imports to meet its demand for crude oil. The domestic output was below 37 million tonnes in the fiscal of 2015-16 and around 30 million tonnes during the period April-January 2016-17.