RUS | ENG | All
Enter the email or login, that you used for registration.
If you do not remember your password, simply leave this field blank and you will receive a new, along with a link to activate.

Not registered yet?
Welcome!

2022-06-01 10:35:00

RUSSIAN OIL FOR INDIA UP

RUSSIAN OIL FOR INDIA UP

REUTERS June 1  - There's a split emerging in India's refining sector as private refiners tap cheap Russian crude and boost profits from exports just as domestically focused state refiners get squeezed by high oil costs and government-capped domestic fuel prices.

While many Western buyers are avoiding Russian crude in response to its invasion of Ukraine, Indian private refiners such as Reliance and Nayara have been among the biggest buyers this year of discounted Russian supplies.

They are reaping major profits by reducing domestic sales and aggressively boost fuel exports, including to buyers in Europe, which is now boycotting imports of Russian energy.

In contrast, state refiners are much smaller buyers of Russian crude as they largely buy oil under annual term supply deals. They face potential losses in the June quarter, industry sources say, as they grapple with rising global crude costs and controlled retail fuel prices that are unchanged since early April to rein in spiraling inflation.

India has bought about 62.5 million barrels of Russian oil since Moscow's invasion of Ukraine on Feb. 24 - more than three times more than in the same period in 2021 - more than half for private refiners Reliance Industries (RELI.NS) and Nayara Energy, Refinitiv Eikon data shows.

In turn, private refiners have helped drive total Indian fuel exports 15% higher in the first five months of 2022 compared to the same period in 2021, according to data firm Kpler.

PRIVATES CUT LOCAL SALES

To accommodate sharply higher fuel exports, private refiners have reduced their market share of domestic fuel sales to 7% in April from 10% in the fiscal year to March 2022, an Indian state refinery source said.

State refiners have had to step up domestic sales, but are incurring losses of more than 20 rupees per litre on sale of diesel and 17 rupees a litre on gasoline, a second official at one of the state refiners said.

In light of such different operating environments, brokerage ICICI Securities cut its rating on IOC (IOC.NS), the country's top state refiner and fuel retailer, to 'Hold' from 'Buy', and pitched Reliance as an alternate stock idea.

"This is the golden age of refining margins for refiners. But in India state refiners' negative marketing margins are offsetting the gains from refining business," said Ehsan Ul Haq, an analyst with Refinitiv.

State refiners are also losing more than 200 rupees on each cylinder of cooking gas, the state refining official added.

"The more we sell in the Indian market, the more we lose," said the second source.

"WELL PLACED"

Reliance, operator of the world's biggest refining complex at Jamnagar in western India, recently deferred its refinery maintenance plan, bought "arbitrage" barrels on the international crude oil market, and boosted fuel exports, it said last month.

"RIL remains well placed to benefit from the ongoing surge in refining margins given its high complexity, high diesel yield, and high export ratio," Citi said in a recent report.

Private refiners have priced their fuels at a higher rate compared to their state peers and have reduced supplies to their pumps, several dealers from Reliance and Nayara Energy said, leading to customers turning to state retailers fuel stations.

"We are making refining margins of more than $30 per barrel by processing Russian oil and earning huge profits through exports of refined fuel," said an official at one of the private refiners.

Reliance did not respond to Reuters' email seeking comments.

Nayara Energy in an emailed statement said it is maintaining fuel supplies to its dealers, and acknowledged a "nominal" increase in its retail prices for long-term interest of the company.

BITING THE BULLET

An oil ministry source said state retailers - which control over half of India's 5 million barrels per day refining capacity - made profits in the March quarter due to inventory gains and earnings from other businesses, but bottom lines will be severely hit in the June quarter.

"They (state fuel retailers) have to bite the bullet and meet the domestic demand, while private refiners are printing money as they get oil at discounted rates and are making huge gains by exporting diesel to countries such as Europe," Haq said.

Indian fuel sellers also recently passed on tax cuts to consumers, including on fuels produced before the cuts came in, further hitting earnings, a third refining official said.

"Our primary objective is to meet nation's demand and at the same time strive to make profit as we are listed companies, so it is a challenging task for us," said a fourth official at a state fuel retailer.

-----


Earlier:

RUSSIAN OIL FOR INDIA UP
2022, May, 27, 12:25:00
MORE RUSSIAN OIL FOR CHINA, INDIA
A record volume of Russian oil is on board tankers, with unprecedented amounts heading to India and China as other nations restrict imports because of the war in Ukraine.
RUSSIAN OIL FOR INDIA UP
2022, May, 25, 11:30:00
INDIA REDUCES OIL PRICES
India's federal government decided to cut the excise duty on petrol and diesel in an attempt to rein in high levels of inflation.
RUSSIAN OIL FOR INDIA UP
2022, May, 23, 13:15:00
RUSSIAN OIL DISCOUNTS
The discounted Russian Urals had helped to boost refining margins and operation rates for independent refineries.
RUSSIAN OIL FOR INDIA UP
2022, May, 18, 12:05:00
INDIA'S OIL DEMAND UPDOWN
India's oil demand is expected to grow by 245,000 b/d year on year in 2022, revised up by about 20,000 b/d from an earlier outlook, due to better-than-expected demand trends.
RUSSIAN OIL FOR INDIA UP
2022, April, 22, 11:30:00
RUSSIA OIL EXPORTS UNCHANGED
Combined, Russia's seaborne crude and key oil products exports stood at 6.79 million b/d so far in April, down 640,000 b/d from 7.43 million b/d in February,
RUSSIAN OIL FOR INDIA UP
2022, April, 22, 11:25:00
RUSSIA'S OIL PRODUCTION 10.1 MBD
Oil production averaged 10.1 million barrels a day between April 1 and April 19, with the average production for the month forecast at 10 million barrels a day, down from the March average of 11.01 million barrels a day.
RUSSIAN OIL FOR INDIA UP
2022, April, 1, 11:20:00
INDIA NEED MORE OIL
We imported from Russia just 0.419 million mt in the April-December period of the current fiscal year 2021-22 (April-March). That is just 0.2% of the total requirement.
All Publications »
Tags: RUSSIA, OIL, INDIA
Chronicle:
RUSSIAN OIL FOR INDIA UP
2022, September, 28, 12:14:00
2022 SAUDI PIPELINES INTERNATIONAL CONFERENCE & EXIBITIONS
Eventat Co (a Saudi local company) is hosting the first-ever “2022 Saudi Pipelines International Conference & Exhibitions” from 4-6 October, 2022 at the Dhahran Expo, Dammam (Eastern Province), Kingdom of Saudi Arabia. The three-day conference and exhibition are dedicated to bringing together over “50+ Regional/International speakers, 100+ Sponsors/Exhibitors, 1000+ Delegates and 3000+ Visitors” from around the globe who carry significant interest in enhancing the pipelines lifecycle for the current and future.
RUSSIAN OIL FOR INDIA UP
2022, September, 28, 12:13:00
INTERNATIONAL CONGRESS AND EXIBITION TURKEY & BLACK SEA OIL AND GAS
International Congress and Exhibition Turkey & Black Sea Oil and Gas is an international, professional platform, bringing together over 200 C-suite executives from vertically integrated oil companies, general directors, CTOs of oil refineries, gas processing plants and petrochemical facilities, initiators of investment projects on oil and gas extraction from Turkey and countries of the Black Sea area, officials of regulatory authorities, licensors of production technologies and world suppliers for the industry.
RUSSIAN OIL FOR INDIA UP
2022, September, 28, 12:12:00
Pipelines In A Sustainable Future And Other Highlights Of TOGC 2023(TOGC 2023)
Transportation Oil and Gas Congress (TOGC) is held on February, 20-21, 2023, Istanbul, Türkiye. During 2 days of intensive networking participants get direct access to the whole pipeline chain. Among the highlights of the program are Panels, show type sessions based on discussion between panelists. They discuss the role of pipelines in a sustainable future, digital transformation and optimization of the pipeline industry, pipeline economics and pipeline integrity, H2 in Gas Grid.
RUSSIAN OIL FOR INDIA UP
2022, September, 28, 12:11:00
TRANSPORTATION OIL AND GAS CONGRASS 2023 (TOGC 2023)
Transportation Oil and Gas Congress 2023 (TOGC 2023) takes place on February 20-21, 2023. The Congress brings together representatives from the whole pipeline chain and focuses on both strategic and technical issues of the oil and gas pipeline transportation.
RUSSIAN OIL FOR INDIA UP
2022, September, 28, 12:10:00
NORWAY OIL, GAS PRODUCTION 1.998 MBD
Preliminary production figures for August 2022 show an average daily production of 1 998 000 barrels of oil, NGL and condensate.
RUSSIAN OIL FOR INDIA UP
2022, September, 28, 12:05:00
U.S. FEDERAL FUNDS RATE 3.00 - 3.25%
The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. In support of these goals, the Committee decided to raise the target range for the federal funds rate to 3 to 3-1/4 percent and anticipates that ongoing increases in the target range will be appropriate.
RUSSIAN OIL FOR INDIA UP
2022, September, 28, 12:04:00
9TH INTERNATIONAL LNG CONGRESS LNGCON 2023
9th International LNG Congress (LNGCON 2023) 6-7 March, 2023 Link to the Congress website: https://bit.ly/3tXVmr7
All Publications »