Wave of refinery shutdowns may push India into importing fuel next year
NEW DELHI/MUMBAI (Reuters) - A wave of shutdowns will hit Indian state-owned refineries next year as the country prepares for cleaner fuels from April 2020, company officials said, in moves that could temporarily dent oil demand and push up imports of refined fuels.
India, the world’s third-biggest oil importer
It also means that demand for fuel produced by India’s privately owned refiners will likely climb during the period, as state refiners seek to fill the gap.
State refiners - Indian Oil Corp, Bharat Petroleum, Hindustan Petroleum
The refiners will have to shut
“Next year will be challenging for us as I have to protect my crude throughput and finish the job at the refineries and get ready for Euro VI by April 2020,” said B.V. Rama Gopal, head of refineries at IOC, the country’s top refiner.
IOC plans a roughly month-long shutdown of gasoline- and
Key parts of the refineries requiring a revamp include naphtha hydrotreaters, catalytic reforming units,
India has been gradually reducing sulfur emissions from vehicles since
Motorists in Delhi, which faces major air pollution, moved in April this year to Euro-VI standards, which allow up to 10 ppm sulfur and are known locally as Bharat Stage-VI.
HPCL will shut its diesel and gasoline units while upgrading the crude units at its Vizag and Mumbai refineries for 30 to 45 days, its chairman M. K. Surana said.
He forecast a slight reduction in the company’s crude intake.
“We will take the shutdown in one shot so we don’t have multiple disruptions,” Surana said.
Surana and MRPL managing director M. Venkatesh, who intends to shut some refinery units for up to a month, said they see no need to import fuel in 2019 given that state fuel retailers can access robust production at local private refiners.
Their view is challenged by analysts who estimate weaker
A similar phenomenon was witnessed when India migrated to Euro IV fuel in phases to April 2017, said Sri Paravaikkarasu, head of east of Suez oil for consultants FGE in Singapore.
“There is a high possibility that the lengthy shutdown period could result in a shortage of current Euro IV products in the domestic market. In such an event, Indian NOCs (national oil companies) should turn to the international market for product purchases,” she said.
FGE expects India could import 40,000
BPCL, India’s second-biggest state refiner, has upgraded two of its refineries to superior-grade fuels and is revamping the fire-hit hydrocracker at its Mumbai refinery so it can produce cleaner diesel, its head of refineries R. Ramachandran said.
BPCL plans to shut a crude unit and some other secondary units at the Mumbai refinery for maintenance and upgrades next year for 15-20 days to produce cleaner fuels.
Ramachandran said there could be a need to import “some additional cargoes but it will not be a major hiccup”.
“The shutdowns will be spaced out in a manner to ensure there is enough product in the market. It will be a well-orchestrated exercise,” he said.
Reporting by Nidhi Verma; Edited by Martin Howell and Dale Hudson
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