MUMBAI: Bharat Petroleum Corporation Ltd (BPCL) had started exporting diesel in the July-September quarter, an unusual occurrence for public sector refining and marketing firm.
BPCL said export of diesel continues in the current quarter as well, and it is trying to get term commitments so that it is able to get better price for exports. As diesel demand hit a negative 2.5 per cent in Q2, public sector refiners are for the first time looking at exports to keep their refinery throughput intact.
BPCL is looking at export of 3-4 four parcels or around 200 to 300 TMT of diesel every month, mainly from Kochi, said N Vijayagopal, director (finance), BPCL. “It is better to run refinery at full capacity and export rather than cutting refinery throughput,” he said. The Indian refineries have been running at full capacity for several years as demand for transportation fuel kept expanding.
Though petrol demand is still growing at around 6-7 per cent, diesel which makes up almost 45 to 50 per cent of the production from refineries is now hit due to economic slowdown. PPAC data showed India’s diesel export in September to be at 3.48 million MT in the July-September quarter exports this year was higher at 8.5 million MT compared with 8.1 million MT in the previous year. Falling demand for diesel is a cause of concern for refiners, he said.
Despite the demand concerns BPCL continued to expand its retail network. During the quarter it had commissioned 274 retail outlets, and 500 in all in the first half. It has also been keeping up with its capex target, having spent Rs 4,030 crore of the planned Rs 7,950 crore for the current fiscal. BPCL’s profit after tax rose 40 per cent year-on-year to Rs 1,709 crore during Q2, as it received backlog subsidy payment from the government.
BPCL’s profit
It rose 40 per cent year-on-year to J1,709 crore during the second quarter
It received backlog subsidy payment from the government