With gradual demand recovery, IOC rolls back refinery production cuts

Indian Oil Corporation logo outside a fuel station in New Delhi. Photo: Reuters
With the demand for petroleum products starting to recover, state-run Indian Oil Corporation (IOC) has started a roll-back of throughput cuts taken in the last two months. The company on Monday said it has raised utilization to 60 per cent, and plans to scale it up further by Month end. 

IOC had to curtail throughputs and bring operations down to nearly 45 per cent of design capacities by the first week of April owing to low demand for various products. 

“With the demand for petroleum products gradually picking up, IOC has re-started several process units at its refineries that were down due to the lockdown,” the company said in its statement. It added, “The refineries are currently operating at about 60 per cent of their design capacities with plans to scale up to 80 per cent of the design levels by the end of the month.” IOC has a refining capacity of about 81 million tonnes. 

The refiner has also resumes manufacturing of petrochemical intermediates like HDPE (high-density polyethylene) and Polypropylene at its Panipat complex. IOC expects demand for these products to increase even further in the coming days, and has put the Naphtha Cracker and MEG (Mono-ethylene-glycol) plant at Panipat back into operation. 

Other units, including a Polypropylene plant at Paradip are expected to resume operations later this month. “The revival of the Panipat Naphtha cracker will also facilitate further increase in refinery crude oil throughputs,” the company said in its statement. 

The Naphtha Cracker at Panipat had to earlier reduce throughput substantially and shut down a few units, due to a build-up in polymer product stocks and logistics issues in the wake of the lockdown. 

IOC in its statement said, with the gradual lifting in lockdown restrictions, several downstream industries in the plastics packaging, medical supplies and food packaging sectors have resumed operations. “As a consequence, dispatches of polymer grades such as BOPP, GPBM, PP raffia and PP yarn used in these industries have begun from Panipat,” the company said.

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