By OGJ editors
HOUSTON, May 19 -- India's refiners have been forced to rely on international suppliers for low-sulfur gas oil (diesel) despite high regional prices, said a report from the Energy Security Analysis Inc. (ESAI), Boston.
"The continued pull of low-sulfur gas oil into India has kept bullish pressure under margins [between gas oil and Dubai crude in Singapore], and this shows no sign of disappearing in the medium term," said Rick Mueller, ESAI oil manager.
The Indian government contributes to this import dependence by disallowing higher retail prices and refusing to delay specification changes, he said.
"It remains to be seen how long the government can maintain this policy with refiners reporting heavy losses," Mueller said.
Rising Chinese exports have prevented Singapore margins from rising further in response to the Indian import pull, ESAI said.
Chinese refiners are responding to the elevated gas oil prices, Mueller said. China imported 125,000 b/d of gas oil in December but exported 25,000 b/d in March (OGJ Online, Feb. 15, 2005).
