Refining output dips again after nearing pre-Covid levels amid low local demand

NEW DELHI: Refinery run rates are again falling in the country after reaching near pre-Covid levels, which may reduce crude oil imports, as local lockdowns, monsoon and record prices have hit demand.

Average capacity utilisation at Indian Oil Corp NSE 2.55 %, the nation’s largest refiner, has declined from 94 per cent to 85 per cent in a week as domestic demand recovery stalled in July and the export market remained oversupplied, a company executive said. Run rates at Hindustan Petroleum and Bharat Petroleum NSE 8.05 % too have fallen, as per industry executives.

This is lowering crude purchases by refiners. “We will have to cut back on crude purchases. Oil is no more so cheap that we would want to buy it for storing it,” said an executive at a state-run refiner.