Petroleum export volumes drop 7% in H1
Petroleum product export was down seven per cent in April-September, contrary to anticipation, despite a boost in the country’s refining capacity after the Bina and Bathinda projects. The drop, experts say, is because of shutdown in a few refineries, delay in starting the Bathinda project and strong domestic demand.
At $59 billion (Rs 3.2 lakh crore) yearly, petroleum products are the country’s biggest export earner. According to the petroleum ministry’s data wing, the Petroleum Products Planning and Analysis Cell (PPAC), export of these products in the first half of the year (April-September) fell 7.6 per cent to 28.9 million tonnes against 31.2 mt in the same period last year. In dollar terms, exports fell 13 per cent to $26.4 bn; in rupee terms, it rose four per cent to Rs 143,633 crore, due to a depreciated rupee. Export in 2011-12 was 60.8 mt. The PPAC expects this year’s export to be 68-70 mt.
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Output from the refineries in the first half, at 104.3 mt, was higher by four mt over last year’s corresponding period, at 100.3 mt. “The higher production has been absorbed in the domestic market," said an official at PPAC. “Domestic consumption grew 5.9 per cent in the first half to 76 mt against 71.8 mt in the corresponding period last year. The throughput from Bathinda was not significant in the first half as the refinery took a couple of months to stabilise production after it was inaugurated on April 29. We are sure exports will pick up in the second half."
|Export of petroleum |
|Apr-Sep FY11||Apr-Sep FY12||% change|
|Value in $||30.43||26.36||-13.37|
|Value in Rs crore||1,38,170||1,43,633||3.95|
|Source: Petroleum Products Planning and Analysis Cell|
The six-mt Bina (Madhya Pradesh) refinery, promoted by Bharat Petroleum and Oman Oil, was inaugurated in May 2011. It produced 2.5 mt in the first half of this financial year.
Mangalore Refinery and Petrochemicals Ltd, subsidiary of state-run Oil and Natural Gas Corporation, was forced to completely shut its 15-mt refinery for 10 days in April, due to a shortage of water. Its output in the first quarter dropped 12 per cent to 2.9 mt. Indian Oil, which has the largest refining capacity in the country, also produced 2.4 per cent less in the first half, due to a variety of reasons such as problems at the hydro cracker unit of the Haldia refinery, and extended shutdown at the Guwahati refinery.
An official with one of the public sector refiners said the drop could also be due to a build-up of inventories in the supply chain. “From the second quarter of last year, the supply chain might have been trimmed due to the high volatility in product prices and the exchange rate. Both look more stable in recent times," he said.
Essar Oil, one of the main exporters, said recently it exported only 30 per cent of the produce in the second quarter of this year against 42 per cent in the same period last year. In the first quarter, it exported 20 per cent against 32 per cent in the same quarter of last year. “Higher demand of auto fuels in India is resulting in higher domestic sales," it said.