Crude oil inflows to refiners in September were higher than in the previous month, government data showed on Friday, as refineries ramped up production to meet rising demand.
The refiner processed 4.45 million barrels per day (bpd) (18.21 million tonnes) of crude last month, down from 4.36 million bpd in August, the lowest in 10 months.
Ehsan-ul-Haq, analyst at Refiners, said, “Refiners are increasing throughput to meet the demand during the festive season. Demand is expected to increase compared to the previous months, as people travel more during the festive season.”
On a year-on-year basis, crude inflows to refiners rose about 2.9 percent in September, while crude output fell nearly 1.7 percent to about 600,000 bpd (2.44 million tonnes), the data showed.
Government data shows Indian refiners were operating at an average rate of 88.69 per cent capacity in September, up from 86.89 per cent in August.
Reliance Industries Ltd, operator of the world’s largest refining complex, imported nearly 12 per cent more oil in September compared to 1.2 million bpd in August.
“Some fuels are switching to oil-related products due to the coal shortage, which is encouraging refiners to extend runs. However, higher oil prices are likely to cause some demand destruction,” said Ul Haq.
Fuel consumption in India rose higher in September as economic activity continued to pick up, but rising global oil prices threatened a recovery in the world’s third-largest oil importer and consumer.
Last month, India indicated that rising oil prices could accelerate the transition to alternative energy sources.
Meanwhile, natural gas production rose 26.6 percent to 2.90 billion cubic meters, the data showed.