Indian Oil raises refinery operations to 60% as fuel demand picks up

• With throughputs gradually picking up pace, Indian Oil plans to scale up refinery operations to 80 percent of the design levels by the end of May

• Manufacture of petrochemical intermediates like HDPE (high-density polyethylene) and Polypropylene has also resumed at its Panipat complex

New Delhi: With the demand for petroleum products gradually picking up as several restrictions were eased over the past few weeks, Indian Oil Corporation (IOC) has re-started several process units at its refineries and has increased crude oil processing that had been scaled down due to the lockdown. With throughputs gradually picking up pace, the refineries are currently operating 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.

Indian Oil resumes manufacture of HDPE and Polypropylene

"Similarly, Indian Oil has resumed manufacture of petrochemical intermediates like HDPE (high-density polyethylene) and Polypropylene at its Panipat complex. With the demand for these grades likely to increase even further in the coming days, the Naphtha Cracker, as well as the MEG (Mono-ethylene-glycol) plant at Panipat, are back in operation. The Polypropylene plant at Paradip too will resume operations in a couple of days and other polymer units are also being readied to go online this month itself.  The revival of the Panipat Naphtha cracker will also facilitate further increase in refinery crude oil throughputs," said Indian Oil in a statement on Monday.

Even though the nationwide lockdown had severely impacted the entire value chain of petroleum products, Indian Oil had kept all its refinery units on 'hot' standby to be ready for scale-up to higher throughputs once the product demand picks up.

The backdrop

The Corporation's refineries were operating full throttle before the COVID lockdown but had to curtail throughputs and bring operations down to nearly 45 percent of design capacities by the first week of April in view of product containment issues forced by a steep drop in demand. Despite substantial reduction in sale of petrol, diesel, ATF, fuel oil, bitumen, etc, there was a spike in demand for LPG cooking gas and the refineries responded to the challenge by improving LPG yield from units like FCC/IndMax, etc.

Similarly, Indian Oil's Naphtha Cracker at Panipat was primed to operate well over its design capacity in March but had to reduce throughput substantially, and even shut down a few units, due to a build-up in polymer product stocks as well as logistics issues in the wake of the lockdown. With the gradual lifting in lockdown restrictions, several downstream industries in the plastics packaging, medical supplies and food packaging sectors have resumed operations from late April. As a consequence, dispatches of polymer grades such as BOPP, GPBM, PP raffia and PP yarn used in these industries have begun from Panipat.