BPCL seeks diesel due domestic shortage: sources
If you missed our coverage, here are the top 10 stories of the day.
Bharat Petroleum Corp (BPCL) is seeking a diesel cargo for early May as domestic supply remains tight on the back of refinery maintenance, industry sources said on Thursday.
The refinery is seeking 40,000 tonnes of 350 ppm sulphur diesel for delivery into Kochi over May 8-10. The tender closes on April 23.
Refinery shutdowns at India's 60,000 barrels-per-day (bpd) Numaligarh refinery and Mangalore Refinery and Petrochemicals' 300,000 bpd plant has caused a double impact on BPCL's diesel supply and prompted the need for imports, one of the sources familiar with the matter said.
MRPL has completely shut its plant due to water shortages and has declared force majeure at the refinery, with all shipments except some to Mauritius to be affected.
The Numaligarh refinery, which is 61.65 percent owned by BPCL with the government of Assam and Oil India owning the rest, was due to shut on April 18 after a planned maintenance was brought forward due to a fire at one of its secondary units over the weekend.
Most of the diesel production from MRPL's refinery is for domestic consumption, with about 300,000 barrels exported a month.
"Both the shutdowns are contributing to the diesel shortfall, especially in southern and eastern India," the source said.
The company is assessing on a day-by-day basis on whether there is a need for imports, the source added.
Other state-owned refineries like Indian Oil Corp (IOC) and Hindustan Petroleum Corp (HPCL) do not have immediate plans to import diesel and are trying to manage from the domestic inventory, industry sources said.
"The problem is oil companies are already losing money heavily due to the subsidies, so it's better for them to manage from their own inventories unless there is a real need to import," one of them said.
India's Finance Minister Pranab Mukherjee has vowed to raise fuel prices as soon as possible to tackle a rising subsidy burden and large deficits, but the move is politically fraught for the weak coalition government, already under fire over high inflation.
Diesel now accounts for a third of local fuel use.
Copyright @ Thomson Reuters 2012
