Daily Management Review

Indian oil refineries on the verge of closure


The number of many plants to be closed will depend on duration of the quarantine and the subsequent level of demand.

Jeffrey Beall
Jeffrey Beall
Private refineries such as Reliance Industries and Nayara Energy are also not in a better position, as state-owned fuel retailers drastically reduced their fuel purchases and made the export market unstable.

Demand for oil in India fell 18% in March, and it is expected that these figures will be worse in April. Refineries are also adjusting their configuration to supply more liquefied petroleum gas, which is in high demand. “In order to cope with a decrease in demand for fuel and to satisfy a higher demand for liquefied petroleum gas under quarantine conditions, plants are using all the technical capabilities,” the article reads.

Cash inflows are limited for enterprises, as they now have to pay for the oil they purchased before the oil price fell in early March, while their sales revenue declined, which forced them to attract many short-term loans.

The Economic Times, citing sources, reports that India has decided to replenish its semi-empty strategic oil reserves at its own expense, putting an end to attempts to convince Saudi Arabia and the UAE to store their oil in Indian state reserves. The government has instructed state-owned refineries to place their excess oil in these reserves.

source: economictimes.indiatimes.com