Udayavni Special

Plunging fuel demand has oil cos worried on all fronts

PTI, Apr 7, 2020, 4:34 PM IST

Mumbai: National oil companies are staring at inventory losses as they have to bring down refinery throughputs because of the plunging demand for fuels following the nationwide lockdown to contain the deadly coronavirus infection.

India is the world’s third-largest energy consumer but the COVID-19 lockdown has shut businesses, suspended flights, stopped trains and brought almost the entire vehicular movement to a halt, impacting fuel demand.

For the full the month of March, the total retail volume has come down by 17 per cent, led by a 26 per cent dip in diesel demand and a 17 per cent fall in petrol and practically demand for aviation fuel is down 33 per cent, according to the national data shared by IOC on a year-on-year basis.

The only fuel that saw a demand spike in the month was cooking gas that, too, after panic buying since the national lockdown. Overall, LPG demand rose 1.7 per cent in the month, according to the IOC data.

There are 27.59 crore active LPG customers in the country.

All the national companies have seen a massive spurt in demand for the cooking fuel as people resorted to panic buying, leading to an average 40 per cent rise in demand in the first week of the lockdown.

While IOC, which controls more than 50 per cent of the market, did not share its sales data, both BPCL and HPCL have said their diesel and petrol sales have fallen by over 55 per cent.

HPCL Chairman Mukesh Kumar Surana said that the refinery throughput has come down to around 70 per cent.

While the Vizag refinery is running at full capacity, the same at Mumbai is only around 80 per cent, he said.

From the demand side, he said even though all the filling stations are open there is hardly any demand. While diesel demand is down 40 per cent as trucks are off roads, petrol demand has more than halved as people remain indoors because of the lockdown. Only emergency service vehicles are on the roads. There is practically any demand for ATF too, he said.

R Ramachandran, the refinery director at BPCL has the same thing to narrate. While refineries are running at under 70 per cent, from the demand side the story is more disappointing.

Our diesel and petrol sales are down over 60 per cent and there is virtually no demand for ATF as only a few cargo flights are operational, he said.

However, he expects diesel demand to improve as more trucks come on to roads to deliver essential goods and e-commerce deliveries join them as the lockdown remains in force.

But the companies are fearing inventory losses due to the massive plunge in demand.

Though the company has only minimal inventory level, Ramachandran said, losses are sure for the month and April and going forward if the lockdown extends.

However, the HPCL chairman sounded a bit more confident of managing inventory as he looks to export some fuels if the lockdown gets extended.

Surana also said, since HPCL being a net buyer of refined products, we are regulating our throughput so that we can avoid shutdowns and the resultant inventory losses.

While HPCL has an installed capacity for 15 million tonnes it produces around 18 million tonnes but sells around 28 million tonnes.

Top News

12-yr-old boy from Vijayapura tests Covid+ve; day’s tally at 101

No summer vacation for colleges, universities in upcoming academic year

Lockdown is India’s ‘success’, Rahul making ‘wrong’ statements, says BJP

‘Wild Karnataka’: Prakash Raj, Rishabh Shetty to narrate documentary

Karnataka: Hotels and restaurants to open in few days

COVID-19: 3 Qatar returnees in DK, 3 Maha returnees in Udupi test positive; state toll rises to 2282

Cyclone Amphan a blessing in disguise for lockdown-hit jobless labourers in West Bengal

Related Articles More

States deficit jumps to 4.5% of GDP; Revenue gap seen to soar 7-times to 2.8%: Report

TVS Motor implements temporary pay cuts for employees

ITC to acquire spice-maker Sunrise Foods

Siyaram sets Guinness World Record for online Textile Mahakumbh

Prices of N-95 masks down by up to 47% after NPPA advisory


Tragedy and chaos: Former MIA director recalls Mangalore Air Crash

Lockdown relaxation: Long queues outside liquor stores in Mangaluru

Indian Coast Guard thank Covid-19 warriors

#WeFeed – Feeding stray animals during lockdown!

Mysuru-origin doctor honoured with parade for her service in treating COVID-19 patients in US

Latest Additions

5 healthy skincare habits to follow for healthy skin

12-yr-old boy from Vijayapura tests Covid+ve; day’s tally at 101

No summer vacation for colleges, universities in upcoming academic year

Top Army commanders to deliberate on situation in Eastern Ladakh

Woman constable commits suicide in Ludhiana

Thanks for visiting Udayavani

You seem to have an Ad Blocker on.
To continue reading, please turn it off or whitelist Udayavani.