By Ben DuBose
NEW DELHI -- Private Indian refiners could see global export
prospects diminishing in view of increased competition, the
director of refineries for state-controlled Indian Oil said on
Speaking at the fourth
annual International Refining and Petrochemical Conference (IRPC), R.K.
Ghosh said Indias market share in Europe could be threatened by Middle
Eastern and US producers, while the Asia-Pacific market could
see increased exports from Japan and Australia.
Indian refiners may also face a problem for gasoline
exports, in view of rising Middle Eastern capacity and lower
gasoline demand in the US, said Mr. Ghosh, who gave the
While Indian Oil is state-controlled and
supplies its products primarily for the domestic market,
private companies like Reliance and Essar could be threatened,
thus impacting the broader Indian marketplace.
On the whole, India will continue to have a refined product
surplus, Mr. Ghosh explained. The gap between refining capacity and product
demand, which was at 42 million metric tons (MMT) in 2008-09,
jumped to 65 MMT in 2011-12 and is forecast to jump to 122 MMT
But even with the capacity overhang, Indian refiners have been
quite fortunate, he said, based on a capacity
utilization rate of over 100% during the past five years.
This largely reflects growing domestic demand, Mr. Ghosh
said. High-speed diesel (HSD) demand is projected to grow at 5.5%/year for
the next 10 years, while Indias gasoline demand is likely
to jump by 8.4%/year over that same period.
In addition, several strategies can be implemented to boost
profitability, Mr. Ghosh explained, even in the face of
For example, Indian Oils new refineries have been
designed to handle 100% high-sulfur crude. The company is also
adding delayed coking units for bottom of the barrel upgrades,
thus enabling the company to better handle heavy crudes.
Other strategies include crude blending at port locations
and the advent of a heated pipeline to transport Rajasthan
crudes, he said.
Indian Oil is also in the process of evaluating
hydroprocessing technologies, he said.
There are significant opportunities for margin
improvements in the crude mix and distillate yields, Mr.
From a broader industry standpoint, Mr. Ghosh concluded by
calling for better global cooperation in the sharing of
knowledge and advanced technologies, as well as improved
utilization of existing assets by stretching their operating
We see the path forward, he said.
Were in a transition phase. Weve gone through
building refineries in India in various regions.
Now, we need to educate the public to look at profit.
The forecast is ripe today. People have started understanding
that we need to grow, we need to be more efficient, and we need
to better use the molecules we have.
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