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Our Bureau

Refinery capacity expansion, exports by private refiners cited as reasons

New Delhi April 25 The country's oil products exports for the financial year 2006-07 zoomed by 44.8 per cent, even while the domestic consumption rose by 5.9 per cent and crude oil imports went up by 11.5 per cent.

According to industry sources, exports have seen a sharp increase due to expanding refinery capacity and the private refiners exported more products in the absence of a level playing field in the domestic markets. India is Asia's third largest consumer of oil.

As per a Government date, oil product exports climbed 21.4 per cent to 2.35 million tonnes (mt) in March compared with the corresponding period last year, taking exports for the full year up by 44.8 per cent to 31.14 mt. Despite the demand being high, the domestic oil product sales rose by only 7.1 per cent to 10.95 mt in March and sales for the fiscal under review were up 5.9 per cent to 119.8 mt. Crude oil imports went up by 6.4 per cent to 9.6 mt in March and the imports for 2006-07 were up by 11.5 per cent to 110.8 mt.

Capacity expansion

According to industry, the export growth was due to expansion in refinery capacity. While Essar Oil commissioned its 210,000 barrels per day (bpd) refinery, Indian Oil Corporation doubled the capacity of its Panipat refinery to 240,000 bpd. Besides, the private refiners exported more oil products. However, oil product imports in March still saw a growth of 16 per cent taking the full-year imports to 26.9 per cent (17.05 mt).

Official sources said, "Overall consumption is close to the Planning Commission's estimates of 120.4 million tonnes.'' The International Energy Agency marginally increased its 2007 product demand forecast for India to 3.4 per cent in its latest report, to slightly above 2.7 million bpd. Kerosene imports during the year rose 36.4 per cent as private refiners did not supply the product to state-run companies.

Diesel sales in March rose 11.6 per cent last month and 6.7 per cent over the year under review. Petrol sales jumped 15.6 per cent in March and 7.5 per cent for the full year. Domestic sales of naphtha surged 22 per cent in March as power shortages meant more plants used the light oil product.

More Stories on : Petroleum | Exports & Imports

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