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Crude output rises by 4.5% in May; growth pace decelerates

29 Jun 2011 Evaluate

The crude output from Indian refineries has increased by 4.5 percent as compared to the output during May last year. This rise is due to increased crude processing by PSUs whose output rose on an annual 8.7 percent in May when global refining margins improved and Indian fuel demand rose by an annual 5 percent. 1.44 million tonnes or 3.40 million barrels per day (bpd) oil was processed by domestic refiners during May. Throughput of private refineries was down 4.4 percent from a year ago. However, any specific reason for the lower crude processing by private refiners was not cited by government.  Also, crude processing by 120,000 bpd Bina refinery in central India, which came on-stream earlier this year, has not so far been included in the data.

Reliance Industries’ two refineries at Jamnagar, which account for about a third of India's refining capacity, output fell on an annual 5.7 percent and of Essar Oil’s Vadinar refinery’s output declined by 1.2 percent during May as compared to corresponding month last year.

The decline of output from private refineries and low production from the country's biggest producer Mumbai High fields as a scheduled shutdown spilled over to May slowing the pace of growth from April; which was 11 percent and decreased to 9.6 percent during May to 763,500 bpd.

India, the world's fourth-biggest crude importer, produces only a fraction of its overall needs. However, government is constantly trying to increase the production by allowing government-run and private companies to explore the Indian waters. Government encouraged private companies in this sector through introduction of New Exploration Licensing Policy in 1999, as it is believed that India is amongst the least explored countries in world (only 60 percent is being explored).

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