Facing low margins, demand yorker, refiners reduce run rate

INDIAN OIL refiners are facing a double whammy: along with low refining margins, poor demand for petroleum products is leading to a build-up in inventories — forcing refiners to reduce run rates.

Sources said Indian Oil Corporation had reduced its refinery run rate to 88 per cent, while privatisation-bound Bharat Petroleum Corporation Ltd cut its run rate to 85 per cent of its refining capacity. Run rate is the proportion of crude processed by a refinery relative to its total processing capacity.

“ A build-up of bitumen, sulphur and diesel stocks have forced refineries to reduce production,” said an official, adding refiners were looking for options to evacuate rising stocks of petroleum products and speaking with large buyers, such as the Indian Railways, to pre-pone purchases.