India's refinery processing limps to 6-month peak

Crude throughput highest since March, but below pre-COVID levels

  
Birds fly past the Oil and Natural Gas Corp's (ONGC) wells in an oil field on the outskirts of Ahmedabad, India, September 8, 2016. Picture taken September 8, 2016. Image used for illustrative purpose

Birds fly past the Oil and Natural Gas Corp's (ONGC) wells in an oil field on the outskirts of Ahmedabad, India, September 8, 2016. Picture taken September 8, 2016. Image used for illustrative purpose

REUTERS/Amit Dave

Crude oil processed by Indian refiners hit the highest in six months in September, in another sign that demand for fuel is recovering from the blow to economic activity and transportation from coronavirus restrictions.

Crude oil throughput in September rose 13.4% from the previous month to 4.33 million barrels per day (17.71 million tonnes).

This was the highest since the onset of the country's coronavirus restrictions in March, when refiners processed 5.01 million bpd of crude oil.

Fuel demand also rose for the first time since June last month, data showed earlier. 

October gasoil sales rose for the first time since March, preliminary data showed, signalling a pick-up in industrial activity ahead of key festivals.

"There have been some promising signs of recovery in India, which in recent years has been the second demand engine after China," said UBS analyst Giovanni Staunovo.

"Despite the rising number of COVID-19 cases in the country, the removal of mobility restrictions has supported oil demand."

India has reported a downward trend in coronavirus infections since hitting a single-day high of 97,894 new cases on Sept. 17, although it still remains the world's second worst-affected country.

Having posted its biggest drop since at least 2003 in April, crude processing has recovered about 20% in September, although it still remains 8.7% lower compared to the same month a year ago, government data showed on Friday.

Indian refiners operated at about 86.22% of their overall capacity in September compared to 76.10% in August, data showed. This was the highest refinery utilization rate since March.

Top refiner Indian Oil Corp (IOC) operated its directly owned plants at 81% capacity, the data showed.

Reliance, owner of the world's biggest refining complex, operated its plants at 89.37% capacity.

Crude oil production fell by 6% from a year earlier to 2.49 million tonnes (608,000 bpd), the monthly report showed.

(Reporting by Swati Verma and Sumita Layek in Bengaluru Editing by David Goodman) ((Swati.Verma@thomsonreuters.com; within U.S. +1 646 223 8780 , outside U.S. +9180 6182 2831/3590; Reuters Messaging: swati.verma.thomsonreuters.com@reuters.net))

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