Monsoon Brings Good Luck to India's Diesel Export Business

BENGALURU: Monsoon rain has always got smiles for India's diesel export businesses and continuing the trend it is expected to hover near a three-year high in September. As per traders and refineries, during monsoon, usage of irrigation pump sets and generators by farmers are less and hence, utilization of diesel also decreases every year. Consequently, there is a rise in diesel availability for export during these months.

State-owned Indian Oil Corp exported diesel for the first time in about five years and also refinery could do a better business this year in the monsoon. Indian oil refinery is all set to ship out huge amount of oil by the end of September, according to traders. Refinery export has increased its export from 2.85 million tonnes to 3.371 million tonnes, compared to last month, as per government data.

Approximately after five years, Indian Oil Corp exported its first low-sulphur diesel cargo and that was followed by another cargo this week. Traders found that first cargo was traded at a deep discount because of the low flash point, which made it harder to blend.

It is said that the refineries in India are running at almost maximum capacity due to healthy refining margins driven by low feedstock prices.

Indian Oil’s latest refinery Paradip that processes 300,000 barrel per day will work at full fledged capacity by the end of the current fiscal year, notably the refinery was commissioned in late 2015. The refinery is expected to ramp up IOC’s diesel output by 200000 tonnes next month, which will decrease the consumption of oil from private refiners. As a result, it increases exports from private refiners like Essar Oil and Reliance Industries.

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