As the fuel demands are lower in the country due to partial and full lockdown in various parts of the country, the oil refiners are undergoing maintenance in anticipation of a revival in fuel consumption in the coming months.
As a general trend in the country, the refineries usually undergo maintenance during April and May every year. Bharat Petroleum Corp. has lined up work at its plants across India, while Hindustan Petroleum Corp. is completing pending repairs and an expansion of its Mumbai refinery.
Fuels sales fell about 30% in May as compared to pre-virus levels in 2019, as the second wave hits the country. so, due to this, there are fuel stockpiles at refineries and storage facilities, forcing plants to cut crude processing by about 15% last month.
According to a Bharat Petroleum Corporation executive, “With a steady decline in Covid-19 infections from a peak in early May and a relaxation of restrictions on movement, refiners are expecting fuel demand to start improving. Consumption will be higher in June than last month and should recover to around 90% of pre-virus levels in July.”
India’s economy is likely to see improvement inactivity due to an accelerated pace of vaccination from the next quarter, according to UBS Securities.