Indian Oil Scales Up Refinery Run Rates as Demand Heads Towards Recovery

Anticipating gradual pickup in demand of its petroleum products, state-owned refiner, Indian Oil Corporation (IOC) has decided to reduce the throughput cuts that it had implemented in the last two months due to evaporating petrochemicals’ demand amid lockdown measures. On Monday, the company officials revealed that they have raised the capacity utilization rates to 60 per cent and are planning to further ramp up production (up to 80 per cent) by the end of May. Due to fall in demand for its various products, Indian Oil implemented throughput cuts and reduced operations to nearly 45 per cent of actual capacities, by the first week of April. IOC has also resumed production of intermediates like Polypropylene and HDPE (high-density polyethylene) at its Panipat complex. The company is expecting demand to rise in the coming days and has also started operations at its Naphtha Cracker and MEG (Mono-ethylene-glycol) plant at Panipat. IOC’s Naphtha Cracker at Panipat had to slash its throughputs and even shut a few units, as demand slowdown and logistics issues eventually led to pileup of polymer product inventories. In a recent interview, the company officials mentioned that due to a gradual lift in lockdown restrictions, several downstream industries involved in plastic packaging, medical supplies and food packaging sectors have resumed work which have driven demand for several grades of polymer such as GPBM, BOPP, PP raffia and PP yarn, which are primarily used as raw material in these industries.