India’s crude oil processing declined month-over-month in April as large refineries cut crude oil production due to a second wave of coronavirus infections that limit fuel mobility and demand.
According to the government, refineries processed about 4.9 million barrels per day (bpd) or 19.89 million tons of oil last month. That was 1.2% less than in March, but a jump of 35% over the previous year.
“Currently, companies are not operating at maximum capacity as several states have partially shut down and given permission to operate at half capacity,” said Gaurav Garg, director of research at CapitalVia Global Research. Fuel demand also fell last month as the world’s third largest oil consumer reported around 250,000 infections and 4,000 deaths every day.
A second wave of viral infections has forced several states to impose tighter restrictions to limit the movement of people, affecting industrial activity and fuel consumption.
Indian refineries operated at an average rate of 96.82% in April, up from 98.89% in the previous month, the data showed. The country’s largest oil refinery, Indian Oil Corp, has cut crude oil processing from 96% in April to an average of 84% of total capacity.
Road traffic has been severely impacted in both cities and rural areas, and the impact on demand for refined products is expected to continue into the third quarter, she added. On an annual basis, the country’s crude oil production fell by 2.1% to 609,000 bpd or 2.49 million tons and was down 4.6% from March.