Indian oil refineries have been forced to delay the maintenance of some plants because technicians and workers are either fleeing their hometowns or falling ill amid a rapid resurgence of the Covid-19 pandemic.
Bharat Petroleum Corp. and Indian Oil Corp. they postponed planned closures due to a lack of contract workers, company officials who know about it said. Refineries will need to continue operating these plants, re-evaluate their feedstock plans and perhaps reduce overall operating speeds, they said.
The health system in the country is overwhelmed by an increase in infections and a lack of oxygen. Major Indian highways were abandoned earlier this month as locks and curfews were introduced in major cities. The move spurred a drop in fuel sales as police patrols were stepped up to keep people away from the streets and their stalls rolled down the shutters.
Bharat Petroleum has pushed for a planned shutdown of the plant in Mumbai and plans to postpone work at its Bina plant, which was scheduled for June, according to officials who asked not to be identified because the information is not public. The IOC, India’s largest processor, has also indefinitely postponed the maintenance of the plant in Paradip scheduled for August, they said.
Rising infections are causing labor disruptions that threaten to disrupt labor-intensive sectors across the country with 1.4 billion people. Although basic services such as port and terminal operations remain operational for the time being, their continuation increases the risk of the virus spreading even faster.
Migrant workers have fled major cities in recent weeks amid fears of a repeat of last year’s national blockade, leaving millions displaced and out of work. Refineries are wary of maintenance that requires thousands of workers and temporary workers to travel from various parts of the country and stay together for weeks, officials said.
Any decision to postpone the planned work would force refineries to adjust their plans to import crude oil, which could result in certain changes in the refineries’ current and term purchases, they added. Depending on that, the weak outlook for fuel demand could trigger a flood of exports of petroleum products from India, a prospect sought by Asian traders.
The IOC offered gasoline for May in rare tenders this week, which could be an indicator of reduced fuel consumption due to locking and curfew. Overall, India’s daily demand for gasoline and diesel is expected to fall by at least 110,000 barrels and 200,000 barrels, respectively, in April, said Juan Carlos Rodriguez, OilX analyst for data analytics.
Indian processors will have to coordinate future maintenance and closure in the future so as not to disrupt the national supply chain, officials said. Several refineries planned to carry out works and inspections this summer after postponing them in 2020 due to the first wave of coronavirus infections.
Mangalore Rafinery & Petrochemicals Ltd. they cut operating rates at their plant in southern India earlier this month due to falling fuel demand. The company plans to further reduce crude oil refining next month. The IOC is currently operating with less than 100% capacity and could consider lower scores, one official said.
This story was published from the wire agency feed without changes in the text. Only the title has changed.