NEW DELHI: State oilNSE 2.13 % companies have told the government they will have to shut down a few refineries if the nationwide lockdown is extended beyond April 14, people familiar with the matter said.
A deep demand destruction due to lockdown has left most refineries with run rates of barely 50-60% and little tank space to store their refined products or crude oil. An extended lockdown would keep demand low and require refiners to respond with supply cut.
“Indian refiners are accustomed to running their units at more than hundred per cent capacity utilisation. But today we are doing much less. If the demand doesn’t improve, some refineries will have to be shut,” said an executive at a state refiner. “It’s going to be a hard decision. Nobody wants to shut a unit because restarting has its own technical challenges.”
