BPCL to operate refineries at 70% capacity by month-end, HPCL to follow suit

• HPCL is already operating its Visakh refinery at 100 percent and its Mumbai refinery at 80 percent

• BPCL has scaled up crude processing to 58 percent now

New Delhi: With the gradual easing of restrictions placed in the wake of the COVID-19 outbreak and the subsequent lockdown, as demand for petroleum products is picking up, two state-run OMCs (oil marketing companies) — HPCL and BPCL — are looking to further ramp up refining operations by the end of May. While HPCL is already operating its Visakh refinery at 100 percent and its Mumbai refinery at 80 percent, BPCL has scaled up crude processing to 58 percent now.

PSU Watch had earlier reported that with fuel demand gradually picking up pace, Indian Oil had ramped up refining operations to at about 60 percent of their design capacities with plans to scale up to 80 percent of the design levels by the end of May.

HPCL will ramp up refining further based on demand: CMD

While stating that HPCL is already operating its Visakh refinery at 100 percent and Mumbai refinery at 80 percent of the design capacity, HPCL CMD MK Surana told PSU Watch, "The demand of products has picked up with successive relaxations in lockdown conditions and is currently about 60 percent of the normal which we expect will improve further in the coming days. Based on the demand, refinery throughputs shall be ramped up. We are encouraged with the trend in the last 10 days. The onset of agricultural season will also help in pushing diesel demand."

BPCL to scale up crude refining to 70% by May-end

BPCL refineries, which were operating at full capacity before the lockdown, had to curtail crude processing throughput down to nearly 50 percent of capacity in the month of April in response to a steep decline in fuel demand in the wake of the Coronavirus lockdown.

"However, with demand for petroleum products, mainly HSD (High-Speed Diesel), gradually picking up as lockdown restrictions are eased, BPCL has scaled up its crude processing capacity to 58 percent now," BPCL Director (Refineries) R Ramachandran told PSU Watch.

"With the gradual lifting in lockdown restrictions, several downstream industries are restarting their operations which will help in increasing crude processing capacity. By the end of May, we are expecting the crude capacity to be in the range of 65-70 percent," he added.

The backdrop

Fuel demand in the country dropped to the lowest since 2007 in April, government data showed.  In comparison to the previous year, fuel demand dropped 45.8 percent as a nationwide lockdown, and travel curbs were placed to combat the spread of COVID-19 pandemic, bringing economic activity in the country to a standstill.

Consumption of fuel, a proxy for oil demand, stood at 9.93 million tonnes — the lowest since 2007.