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The Indian Oil Corporation's Gujarat Refinery registered gross refining margins (GRMs) for 2016-17 at US$ 7.7 per barrel, one of the highest at least in the past three years, top company officials informed here.
With increased operational efficiency, reduced costs and technical upgradation led the GRMs of IOC's flagship refinery to US$ 7.7 per barrel, up from US$ 4.87 per barrel in 2014-15 and US$ 6.73 per barrel in 2015-16, informed Sudhir Kumar, executive director, Gujarat Refinery.
"Gujarat Refinery has achieved a new crude processing record of 13.99 million metric tonnes per annum (MMTPA) during 2016-17. The distillate yield of the refinery has improved to 81 per cent up from 80.1 per cent in 2014-15, thereby providing better production. As we are on the path of augmenting the refinery capacity from current 13.7 mmtpa to 18 mmtpa, we look at increased operational efficiencies," said Kumar.
The Gujarat Refinery operates 40 processing units producing 30 different petroleum products. In the new fuel regulation regime, the Refinery has already started supplying 100 per cent BS-IV compliant petrol (Motor Spirit) and diesel (High Speed Diesel) from January 2017. The Refinery gets 40 per cent its crude requirements from indigenous sources mainly from fields in North Gujarat, South Gujarat, Mangala fields and partly from Bombay High, while it sources 60 per cent crude from international sources such as Saudi, Venezuela, Iran and Africa.
GST Impact
Commenting on the possible impact after the roll out of new tax structure of Goods and Services Tax (GST), the officials maintained that the Refinery at Koyali is likely to face a financial impact of Rs 80 crore annually, while the overall refinery sector may face a financial cost of around Rs 3,400 crore.
"GST has five products including crude oil, natural gas, petrol, diesel and aviation turbine fuel (ATF) exempted from the coverage for initial years. The non-creditable tax cost of these products will be significant and it will result as a financial impact on the refineries and we have to absorb it as a cost," said Saurav Mitra, DGM - Finance, Gujarat Refinery informed. However, discussions are underway at the ministry level between the Ministry of Petroleum and Natural Gas and Ministry of Finance.
For the expansion of the refinery from the existing 13.7 mmtpa to projected 18 mmtpa capacity, Kumar informed that the company would require about 65 acres of land. "The capacity augmentation of the refinery is under active consideration and evaluation," he said.
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