The crude prices globally have fallen drastically. Discussing the impact of that and the lockdowns due to rise in coronavirus patients on the business MK Surana, CMD of HPCL said they have made a plan to operate important facilities with minimum staff.
“As far as petroleum products are concerned, they come under essential commodities. So, we are committed to keep the supply lines of the essential commodities to the normal public on. Therefore the refineries, the operating locations like LPG bottling plants, terminals, and depot, which supplies and makes the product reach to the petrol pumps are being operated, but with a reduced staff,” he said.
As far as petrol pumps are concerned, Surana said that a reduced number of petrol pumps will continue to function depending on the situation. “Petrol pumps and LPG services at most of the places have been exempted from the curfew or the lockdowns, but there may be reduced number of petrol pumps which may be operating if the local administrations so desire,” he said in an interview with CNBC-TV18.
Speaking about the impact of the lockdowns, he said, “After March 15, lockdown and curfew was implemented by most of the states. Definitely there will be an impact of these restrictions on the demand because people will not be able to travel. At the same time in the initial days people had tried to buy LPG cylinder for their house or fill up the tanks, etc. However, in the next 10 days there will be an impact on the demand. So, we should expect a lower demand growth in March as compared to what we had same period last year.”
On crude prices he said, “Overall the prices dropped. So, the working capital would be better. But demand restrictions would put some restraints on the liquidity in the market. As far as gross refining margins (GRMs) are concerned, the cracks had been on the lower side. Diesel cracks have improved in last 2 days, but gasoline cracks still continue to be on the lower side.”