India Sustains Crude Buying at Record, Boosts Diesel Importsby and
Imports at 4.39 million bbd; diesel buying at five-year high
Product imports rise on refiner disputes, water shortages
India sustained crude oil imports at a record and purchased more diesel than it has in the previous three years combined.
The South Asian nation imported 17.96 million metric tons of crude last month, according to data released Wednesday by the oil ministry’s Petroleum Planning and Analysis Cell. That’s roughly equivalent to 4.39 million barrels a day, little changed from a record in March. A surge in diesel buying to a five-year high pushed net exports of the fuel to the lowest since May 2015. Total product imports at 3 million tons were the highest ever.
India is becoming the center of global oil demand growth as an expanding economy translates into more goods being transported and increasing consumer spending. Water shortages and disputes between government-owned refiners and their private rivals has further boosted the need for overseas supplies.
“The water shortages have led to run cuts at some refineries, while growing demand continues to result in Indian state-owned refiners importing products in the spot market,” said Virendra Chauhan, an oil market analyst at Energy Aspects Ltd.
Bharat Petroleum Corp., Indian Oil Corp. and Hindustan Petroleum Corp. are turning to fuel imports because of an ongoing dispute over freight costs and taxes with private refiners Reliance Industries Ltd. and Essar Oil Ltd. Mangalore Refinery and Petrochemicals Ltd. last month shut a crude distillation unit with an annual capacity of 3 million metric tons at its facility in southern India because of water shortages.
A strong monsoon season -- which runs from June to September -- should ease diesel imports as water levels improve, Chauhan said.
The country imported 508,000 tons of diesel in April while exporting 2.1 million tons. That left the country’s net exports -- a measurement which strips out inbound shipments -- at the lowest in 11 months. Gasoline exports slipped to 1.37 million tons, the lowest since September.