After the start-up of three new Indian refineries and the tripling of capacity at Mangalore Refineries & Petrochemicals Ltd.'s complex, there is not a glut of petroleum products in the country, as might be expected.
The national distribution agent, Indian Oil Corp., still finds itself importing diesel 3 months after the country was supposed to attain self-sufficiency in refined products output. Industry sources say the answer lies in the tremendous jump in crude oil prices, but numerous operating difficulties have contributed to the country's products supply troubles.
The 160% jump in oil prices during the last 12 months has eroded the gross margins of refineries around the world. In India, however, oil companies have the added burdens of a 20% duty on crude oil and administered prices for key petroleum products.
In the first 9 months of 1999, India's refiners were plagued by unexpected maintenance shutdowns, storage capacity shortages, and, for one refinery, even a fire.
Massive expansion
In the past year, three new refineries have started up in India: Reliance Petroleum Ltd.'s 360,000 b/d plant at Jamnagar, IOC's 120,000 b/d plant at Panipat, and Numaligarh Refinery Ltd.'s 60,000 b/d plant at Assam. In the meantime, Mangalore Refineries has increased the capacity of its refinery to 180,000 b/d from 60,000 b/d. But this unprecedented distillation capacity increase of 660,000 b/d has not yet had the intended effect of eliminating product imports.
Domestic refining and marketing companies have not announced a reduction in refinery throughput, but the production of petroleum products is significantly lower than the target for the first 9 months of the 1999-2000 fiscal year.
India's 17 refineries together operated at 94.1% of installed capacity during April-December 1999, compared with 98.4% in April-December 1998.
And as many as eight refineries reportedly resorted to temporary shutdowns in November and December of last year.
Operating problems
Numaligarh said its refinery was shut down for maintenance; the plant operated at an average 4.5% of installed capacity during the 9-month period.
Meanwhile, Reliance announced Jan. 11 that commissioning of its Jamnagar refinery was complete, but capacity utilization at the plant was only about 60%. And IOC's new Panipat refinery operated at 61% capacity during the period.
A fire at the refinery forced a shutdown of its crude distillation unit for 12 days beginning Nov. 20, 1999.
IOC's Gujarat refinery shut down its No. 4 Atmospheric Unit (AU) for 45 days during the period and AUs 1, 2, and 3 for 4 days in November.
Meanwhile, its Mathura and Guwahati refineries experienced storage capacity shortages.
Cochin Refineries Ltd. took down its crude distillation and fluid catalytic cracking units for annual maintenance turnarounds. Hindustan Petroleum Corp. Ltd.'s (HPCL) Visakhapatnam refinery-the scene of a massive fire in 1998-experienced a delayed restart of some of its units.
The HPCL refinery operated at 92% of its rated capacity during the first 9 months of this fiscal year. One source said, "The refineries seem to have had 101 problems, but the fact remains that crude throughput was much lower this year than planned."
All 17 refineries in the country were expected to have contributed 69.66 million tonnes of petroleum products in 1999 but turned out only 61.06 million tonnes in the end.
