India’s top refiner Indian Oil Corp. (IOC) expects refinery run rates to maintain below capacity in the fiscal year 2020/2021 as the local and foreign demand for fuel stay subdued.
Chairman S. M. Vaidya said that in early July, refinery runs have contracted to around 75% from 93% on low fuel demand. He added that operations would likely remain at 70-75% for the remainder of this fiscal year, but the company could increase refinery runs to 90% if demand recovers.
IOC has closed its 300,000 bpd Pardip refinery for maintenance and will close some units in its 274,000 bpd Koyali refinery for repairs in this fiscal year.
The company’s second-quarter profit has slumped by 47% due to the lockdowns which tattered fuel demand. IOC also saw its refining margin got to minus USD1.98/barrel.
In general, Indian refiners have been slowing activities and closing units for maintenance, taking the momentum of globally weak demand. Export markets are deemed unattractive, moreover as China added fuel exports, adding pressure on refining margins.
Looking ahead, Vaidya expressed his wish for oil prices to stay at about USD40/barrel in the second half of 2020. Through a maximized petrochemical production at its refineries, IOC estimated to boost revenue.
