Indian refiners processed 2.5% less oil in July compared to June, the first monthly fall since April, as renewed restrictions due to rising coronavirus cases stalled recovery in fuel sales in the world’s third-largest domestic market.
India refiners’ crude processing plunged by a record 28.8 per cent in April, when the country was under complete lockdown and has been recovering since as its normally traffic-clogged cities eased restrictions, putting drivers back on the road.
Processing by Indian refiners in July, by comparison, was down 18.8 per cent from a year earlier to 4.18 million barrels per day (bpd) or 17.68 million tonnes, the government data released on Tuesday showed.
At the heart of the fall is a slide in fuel consumption, with data last week showing an 11per cent fall in actual oil sales.
Weak refining margins have also encouraged refiners to rein in output and capacity use is set to decline further in August due to shutdowns at Reliance Industries Ltd`s Jamnagar plant and the complete closure of IOC`S 300,000 bpd Paradip for most of the month.
Indian refiners operated at about 83.3 per cent of their overall capacity in July compared to 85.4 per cent in June, the data showed.
Top refiner Indian Oil Corp (IOC) operated its directly owned plants at 90.6% capacity, the data showed.
The company said last month it would continue to operate its refineries below capacity in 2020/21 due to expectations demand would remain subdued.
Reliance, the owner of the world`s biggest refining complex, operated its plants at about 74 per cent capacity.
In an outbreak that trails only Brazil and the United States in terms of size, coronavirus cases in India surged to 3.17 million on Tuesday.
Natural gas output in July declined 10.3% from a year ago to 2.44 billion cubic metres, and crude oil production fell by 5% to 2.63 million tonnes (620,000 barrels per day), the data showed.
