The wave of refinery shutdowns could push India to import fuel next year

According to company officials, refineries owned by the Indian state are preparing to use cleaner fuels from April 2020, which could temporarily dampen oil demand and increase imports refined fuels.

India, the world's third largest importer and consumer of oil, has excess refining capacity and seldom imports gas oil or gasoline.

This also means that the demand for fuel produced by Indian private refiners is likely to increase over this period, with state refiners seeking to fill the gap.

State refiners – Indian Oil Corp., Bharat Petroleum, Hindustan Petroleum and Petrochemical Mangalore refineries – account for about 60% of the country's capacity, estimated at 5 million barrels per day.

Refiners will have to close their gasoline and gasoline production units for 15 to 45 days to produce Euro VI compliant fuels from January 2020 so that they can be sold from April this year. year.

"Next year will be difficult for us because I have to protect my raw flow, finish the work in the refineries and prepare for the Euro VI by April 2020", said BV Rama Gopal, head of refineries at IOC, the country. top refiner.

IOC plans to shut down its gasoline and diesel production units in all 11 refineries for about a month, he told Reuters.

The main refinery components requiring modernization include naphtha hydrotrasers, catalytic reforming units, isomerization units, diesel sulphurizers and diesel hydrotreators. In addition, some refiners have to reorganize or set up new gas processing, hydrogen production and sulfur recovery units.

India has been steadily reducing sulfur emissions from vehicles since 2000, while the fuel sold in the country contained 500 parts per million (ppm).

Delhi motorists, faced with significant air pollution, adopted Euro-VI standards in April of this year, which allow up to 10 ppm of sulfur and are known locally as Bharat Stage-VI.

HPCL will close its diesel and gasoline units while upgrading the raw units of the Vizag and Mumbai refineries for 30 to 45 days, announced its chairman, Mr. K. Surana.

It provides for a slight reduction in the company's crude consumption.

"We will proceed to close one shot in order to avoid multiple disruptions," Surana said.

million. Venkatesh, general manager of MRPL and MRPL, which plans to close down some refinery units for up to a month, said it does not need to import fuel in 2019, since the fuel retailers in State can access a robust production of local private refiners.

Analysts dispute their view that low gasoline and gasoline prices would cause refiners to import motor fuel instead of shipping to companies private companies that charge for coastal shipping in addition to normal prices.

A similar phenomenon was observed when India migrated to Euro IV fuel in stages until April 2017, said Sri Paravaikkarasu, East Petroleum Manager for FGE Consultants in Singapore.

"It is quite possible that the long period of shutdown will result in a shortage of current Euro IV products in the domestic market, in which case the Indian NOCs (national oil companies) should look to the international market for buy products, "she says.

FGE expects that India may import 40,000 barrels of gasoline and 70,000 barrels of gasoline for about a quarter in 2019 due to closures.

BPCL, the second largest state refiner in India, converted two of its refineries into premium fuels and reorganizes the fire hydrocracker at its Mumbai refinery to produce cleaner diesel, its leader refineries, R. Ramachandran said.

BPCL plans to close a crude oil unit and some other secondary units at the Mumbai Refinery for maintenance and upgrades for 15 to 20 days to produce cleaner fuels.

Ramachandran said that it might be necessary to "import" some extra cargoes but it will not be a major problem ".

"The closures will be spaced so as to ensure that there is enough product on the market, it will be a well orchestrated exercise," he said.