India's Refinery Throughput Stays Firm With Strong Recovery In Sight

Indian refiners' crude oil throughput rose in January, holding near 21-month highs reached in November, with fuel demand and refinery runs expected to grow further on the back of a strong economic recovery. Crude oil throughput in January was however down 0.5% year-on-year to 5.13 million barrels per day (21.71 million tonnes), government data showed on Wednesday. Throughput in January was 1% higher from December levels and holding near November's 5.25 million bpd.

"It shows continued recovery," said Refinitiv analyst Ehsan Ul Haq, adding that although high oil prices are a drag, the end of COVID-19 restrictions bode well for demand and crude throughputs. Initial government estimates show that India's fuel demand is likely to grow 5.5% in the next fiscal year beginning April 1, reflecting a pick-up in industrial activity and mobility in Asia's third largest economy. Diesel and petrol sales also rebounded in the first fortnight of February from the previous month in India as states lifted most of the COVID-induced restrictions.

Indian refiners operated at an average rate of 102.6% versus 101.2% in December

Indian refiners operated at an average rate of 102.6% versus 101.2% in December, the government data showed. Top refiner Indian Oil Corp (IOC) last month operated its directly-owned plants at 98.2% capacity. Reliance, owner of the world's biggest refining complex, operated its plants at 91.1% capacity in January.

Processing was also impacted by unit shutdowns at some refineries, as per the monthly production report released by the Ministry of Petroleum & Natural Gas.

Crude oil production fell about 2.3% to around 593,000 barrels per day (2.51 million tonnes) year-on-year, the data showed, while natural gas output jumped 12.2% to 2.86 billion cubic metres year-on-year.

"Despite emphasis by the Indian government to boost output, India remains dependent on imports, which is likely to increase in the long-run due to rising demand," Ul Haq added.

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