Face subdued demand from Europe, low margins, and refinery maintenance in upcoming months
The country’s exports of petrol and diesel, which were sluggish during June 2024, are expected to be subdued for the next couple of months largely on account of weak demand from Europe, low margins and upcoming domestic refinery maintenance.
Market players and analysts attribute the development to lower demand for diesel in Europe.
Gasoline or petrol exports fell due to more supplies hitting the domestic market on account of refinery maintenance.
Jet fuel exports, on the other hand, are expected to maintain momentum, albeit not on the scale witnessed during May 2024.
However, diesel exports to Asia continued to rise in June, with cargoes to Africa declining relative to May but well within the historical range.
Data from Petroleum Planning and Analysis Cell (PPAC) show that diesel exports fell by 9.4 per cent m-o-m and 0.5 per cent y-o-y to 1.94 million tonnes.
Outbound cargoes of petrol declined 3 per cent m-o-m to 1.24 mt. On an annual basis, motor spirit exports rose marginally by 0.8 per cent.
Overall, India’s refined petroleum product exports fell by 5 per cent m-o-m and 0.6 per cent y-o-y to around 4.98 million barrels per day (mb/d).
India’s exports to Europe have been subdued largely on account of strong domestic supplies and slow demand, trade sources said.
Vortexa’s Head of APAC Analysis, Serena Huang pointed out that India’s diesel exports to Europe rebounded in June to 125,000 barrels per day (b/d), rebounding from the multi-year low in May. However, they are still down by over 50 per cent year-on-year.
“The rebound in exports is likely driven by lower Middle East exports to Europe in June, as well as a compensation of the weak exports in May,” she added.
While diesel exports to Asia continued to rise in June (around 132,000 b/d), volumes to Africa (around 131,000 b/d) were down relative to May but well within historical range.
India’s gasoline exports last month declined to a five-month low of 360,000 b/d, Huang said.
Trade sources said that high gasoline demand in the Middle East is keeping the barrels in the region, which has impacted exports to East and South Africa during June and July.
As per Vortexa data, India’s petrol exports to Africa stood at roughly 56,000 b/d, a marginal decline of 0.5 per cent M-o-M.
“Export-oriented refineries could be selling more supplies to the domestic market amidst ongoing and upcoming refinery maintenance in the country.
Weak export margins have also dampened incentives for refineries to ramp up exports,” she added.
For instance, state-run Bharat Petroleum Corporation’s (BPCL) Kochi refinery will undergo maintenance during September-October and Bina refinery during August-September 2024.
In the coming months, Huang expects the export momentum to remain subdued.
“India’s diesel exports have remained relatively stable in the first two weeks of July, whilst gasoline exports have fallen further to 260,000 b/d. With a slew of refinery maintenance upcoming, India’s refined product exports could see further declines in the months ahead,” she projected.
