India’s total exports of petroleum
products, which account for over a tenth of the gross value of outbound
shipments, are set to drop below the 1.2 million barrel per day (mbpd) mark in
the current calendar year, the lowest level of annual exports in the past 8
The worrisome trend for export earnings is
attributed to a robust rise in domestic demand coupled with a mega maintenance-led refinery shutdownslated for
2019. The country exported petroleum products – mainly petrol, diesel, naphtha,
fuel oil and lubricants -- worth $35 billion last financial year (2017-18).
“Overall, heavier maintenance program is to be
expected this year, which will affect refinery throughput. This, coupled with
robust domestic demand (expected to grow at 235 mbpd for the year as a whole),
would likely pull India’s total oil product exports below the 1.2 mbpd mark
this year for the first time since 2010,” Jy Lim, Director of Asia-Pacific oil
market analysis at S&P Global Platts told ETEnergyworld.
He added domestic refinery upgradation will be
required as India plans to shift to Bharat-VI standard fuel in April 2020
coupled with the upgradation required to meet the International IMO 2020 bunker
Refiners with planned maintenance in
2019 include Reliance Industries, Bharat
Petroleum (BPCL), Hindustan Petroleum (HPCL) and Indian Oil Corp (IOC),
according to S&P Global Platts. IOC, the largest refiner, will complete its
refinery upgradation activity by the second half of next fiscal (2019-20), B V
Rama Gopal, the firm’s Director-Refineries told ETEnergyworld in an interview
in February last month.
According to Platts, India’s domestic petroleum
product consumption reached 210 Million Tonne (MT) in 2018 and is expected to
rise 4.8 per cent in 2019 on the back of increased demand for petrol, diesel
and Liquefied Petroleum Gas (LPG).
The impact of the twin factors – robust demand
and refinery upgradation activities – is already visible in the export numbers
of the current financial year. “India’s total oil product exports dropped by
355 mbpd (or 24 per cent) year-on-year to 1.1 mbpd in January 2019, marking it
the sharpest year-on-year decline in 9 months and the lowest monthly level
since April 2018,” Lim said.
Data on exports sourced from Petroleum planning
and Analysis Cell (PPAC), an arm of the oil ministry, shows the country’s
petroleum products exports in January 2019 slumped 25 per cent to 4.5 Million
Tonne (MT) as compared to 6 MT exported in the corresponding month a year
Overall, in the April-January period of 2018-19,
the country’s petroleum products exports have suffered a drop of 8.70 per cent
at 51.4 MT, as compared to 56.3 MT exported in the same last fiscal.
PPAC attributes the hit suffered by petroleum
product exports to a drop in out-bound shipments of petrol, naphtha, diesel,
LOBS/lube Oil, Fuel Oil, bitumen and Vacuum Gas Oil due to increased domestic
consumption of petrol, naphtha and diesel recorded this fiscal year.
However, in value terms, petroleum exports
increased 14 per cent to $32.6 billion during the April-January period of
current fiscal as against $28.7 billion worth of exports recorded in the
corresponding period of 2017-18.
Largest export destinations for India’s
petroleum products include Singapore, United Arab Emirates, Netherland,
Malaysia, United States, Israel and Nepal, according to data sourced from the
Directorate General of Commercial Intelligence and Statistics (DGCIS), an arm
of the commerce ministry.
India exported 8.96 MT of petroleum products to
Singapore in the first ten months (April-January) of 2018-2019, as compared to
10.55 MT exported in the corresponding period last fiscal. During the same
period, petroleum Products exports to UAE increased to 8.18 MT from 6.72 MT
while exports to Netherland rose to 5.68 MT from 3.03 MT.