The lack availability of 0.5 percent fuel oil, which is compatible with the IMO rules, threatens to disrupt coastal shipping on India's east coast unless vessels use marine gasoil (MGO) or high-sulphur fuel oil (HSFO).
A trader said refiners did not expect such high demand. Production is approximately at 80,000-90,000 t/month, but demand is above 150,000 t/month.
India’s HPCL started production of as much as 120,000 t/yr (2,000 b/d) of IMO-compliant marine fuel oil at its 167,000 b/d Visakhapatnam refinery on the country's east coast on 3 January. It is unclear how much similar fuel the company produces at its 150,000 b/d Mumbai west coast refinery.
State-owned IOC's total compliant marine fuel production capacity stands at around 1mn t/yr, which is roughly the same as India's domestic demand.
Using low-sulphur North Gujarati crude as a feedstock, IOC's 274,000 b/d Koyali refinery in Gujarat can produce up to 50,000 t/month of 0.5 percent fuel oil at full capacity. Production of compliant fuels at IOC's 150,000 b/d Haldia refinery on India's east coast is more challenging as the plant receives crude with high-sulphur content.
Ports on India's west coast could start receiving steady supplies of IMO-compliant fuels by the end of January. The port of Mumbai will have 0.5 percent fuel oil supplies on 26 January.
