Business

Indian refineries scale back output as virus chokes demand

Updated : April 23, 2020 08:24 AM IST

Indian state retailers sold 50 percent less refined fuel in the first two weeks of April than the same period a year ago as the lockdown hit transportation and industrial activity, industry sources said last week.

India's crude processing in March fell 5.7 percent from a year earlier, its biggest drop since September, as the coronavirus crisis and travel restrictions to curb its spread dented fuel demand and forced refineries to cut output.

Refiners processed about 21.20 million tonnes, or 5.01 million barrels per day (bpd), of oil last month, provisional government data showed on Wednesday. That was lower than the 5.32 million bpd processed in February and in March 2019.

Crude production also declined 5.5 percent in March from a year earlier to around 2.70 million tonnes or 0.64 million bpd.

Many refineries have curbed output with fuel demand hammered by travel restrictions as the pandemic forced people to stay home and stalled economic activity.

India on March 24 announced a three-week lockdown to fight the coronavirus, which has been extended until May 3 as the virus cases continue to increase.

The country has, however, announced a roadmap to restart some industrial activity in locations that are not coronavirus hotspots to try to revive the economy.

The International Energy Agency (IEA) in its latest report estimated India's annual fuel consumption - a proxy for oil demand - will decline 5.6 percent in 2020 to 4.73 million barrels per day (bpd), compared with growth of 2.4 percent forecast in its March report.

India's annual fuel demand grew 0.2 percent in 2019/20, its slowest in over wo decades, dragged down by a hefty 17.8 percent decline in local consumption in March as steps taken to prevent the spread of COVID-19 dented transport fuel sales.

Natural gas output fell 14.4 percent to 2.41 billion cubic metres from the same period last year.

Indian refineries scale back output as virus chokes demand

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