The move comes amid a higher demand for petrol, diesel in IndiaThe country's refinersare gearing up to alter theircrudeoil import mix in favour oflighter grades that yieldmore petrolto meet a surge in demand for the motor fuel in Asia's third-largest economy, company officials and analysts said.Refinersin the world's No.
3 oil importer and consumer will increase imports of petrol-yieldingcrudes from the UnitedStates and West Africa, while cutting heavier sour grades from the Middle East that yieldmoremiddle distillates like diesel and kerosene, they said.The move dovetails with an earlier push to reduceIndia's reliance on Middle East crudes to enhance energy security."Thegasolinedemand is very, very strong, whereas diesel is lagging behind right now," said Amrita Sen, head of research at Energy Aspects."Refinersare shifting yields further togasoline...
I would expectmoreWest African,gasoline-richcrudeto flow intoIndia, less sourcrudeto go in there."Indian refineries are designed to maximise diesel production mostly from Middle Eastern oil, as government-controlled prices made the middle distillate the preferred fuel for industries and trucking firms.But a narrowing price gap between petroland diesel, and a consumer switch to personal vehicles instead of diesel-powered public transport since the onset of the coronavirus, are helping to lift petrolconsumption.Photo Credit: Reuters"Demand growth ingasolineis much higher compared to diesel due to changing consumer preference on personal use vehicles ...
and better power supply reducing use of diesel gensets," said M.K.
Surana, chairman of Hindustan Petroleum Corp.Credit rating agency Moody's Indiaunit ICRA expects the country's petrolconsumption to rise 14 per centto a record 31.9 million tonnes (739,000 bpd) in the fiscal year to end-March 2022, while diesel consumption is expected to take well into the fourth quarter or even next year to recover pre-pandemic levels.Tarun Kapoor, the top bureaucrat in the oil ministry, earlier this month said the country's refining system configuration would be different going forward, focusing on higheroutputof petroland liquefied petroleum gas.Improved road infrastructure has also cut distances and travel times for heavy vehicles, reducing diesel consumption.As well,Indian Railways, a key dieselbuyer, is cutting diesel use as it rolls out a plan to electrify its entire broad-gauge network by 2023.RefinedTaste"India's gasolinedemand will continue to rise ...
so ourcrudediet will change accordingly and move towards thelighter grades," said a Bharat Petroleum Corp Ltd official.Crudewith API gravity ofmorethan 40 - such as United States West Texas Intermediate (WTI)Light, WTI Midland, Nigeria's Akpo and Kazakhstan's CPC Blend - can be used to maximise petroloutputat refineries equipped with fuel-upgrading units such as a catalytic reformer, he said.And Angolancrudes like Palanca, Kissanje and Azerbaijan's AzeriLightthat producemorevacuum gasoil will suit refineries with fluid catalytic crackers, the BPCL official said.Indian Oil Corp, the nation's largest refiner, is having similar discussions about changing up itscrudemix, a company official said.Staterefiners, which mostlybuylighter grades through spot tenders instead of term contracts, also plan to raise the share of spot purchases in their imports to 37 per centin the fiscal year to end-March 2022, from 22 per centin 2018/19, said another official at one of thestaterefiners.The officials declined to be named as they are not authorised to speak to media.Photo Credit: Reuters"Mostrefinerscannot change their plant configuration or install additional blending facility overnight, so to maximisegasolineoutputthe easiest way is to tweak thecrudemix towardslighter grades," said the BPCL official.With the refocus, West Africa's share ofIndia's market could rise to 20 per centin the next few months from about 10 per cent - 17 per centcurrently, while Middle East's share could fall below 60 per centfrom about 65 per cent, Energy Aspect's Sen said."It's not particularly great for the Middle East suppliers and I think West Africa should benefit," Sen said.Photo Credit: Reuters