Covid-19-linked demand squeeze pushes IOC to cut crude processing

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SME Times News Bureau | 25 Mar, 2020
In the wake of substantial reduction in demand for petroleum products post the Covid-19 outbreak in the country, country's largest public sector refiner Indian Oil Corporation has reduced crude processing at most of its refineries by 25 per cent to 30 per cent.

"In the wake of the COVID-19 outbreak in the country, the demand for petroleum products like petrol, diesel, fuel oil, bitumen, etc., have reduced substantially. The demand for ATF (Aviation Turbine Fuel) has also come down sharply due to suspension of flights. Keeping this in view, IndianOil has regulated crude oil throughput at most of its refineries by 25 per cent to 30 per cent," IOC said in a statement.

The cut in crude processing is being reduced after a long gap. This has been done as domestic demand for petrol, diesel, jet fuel and shipping fuel have fallen by over 10 per cent in the first two weeks of March. This comes even though the global oil market remained favourable for Indian consumers with sharp fall in both crude and petroleum product prices.

Indian Oil said though crude throughput has been reduced, upliftment of finished products in the last one week has helped upcountry bulk storage locations of the Corporation build up their stocks for future readiness once the countrywide lockdown is lifted and the demand picks up again.

"The Corporation is keeping a close watch on global cues and the changing market scenario and initiating actions accordingly," the IOC said.

In the midst of reduction in demand for major petro products, interestingly, there has been an increase in demand for LPG cooking gas.

"To meet the rising demand for LPG, IndianOil is taking steps to increase LPG production in its major refineries by optimising operations. Adequate stocks are available and there is no need for panic-booking by LPG customers," the company said.

IndianOil has kept all its fuel pumps operational during the entire duration of lockdown but are operating them with skeletal staff. A high-level committee has also been formed to deal with all matters related to Covid-19 , which has streamlined the working at the Corporation's non-critical locations with work-from-home norms to ensure proper social distancing.