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Exports of diesel and petrol increase in May due to refinery production and surplus fuel stocks

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In Short:

In May, India’s diesel and petrol exports increased due to higher refinery runs, growing inventories, and competition in the European market. Diesel exports to Asia rose, while petrol exports to Africa also increased. However, competition from West Asian and African refiners is expected to impact Indian exports. Despite this, Indian refiners processed more crude oil and petroleum products in May compared to previous months.

India Boosts Exports of Diesel and Petrol in May

Great news! India’s **exports of diesel and petrol** saw a rise in May due to higher refinery runs and growing inventories. More diesel cargoes were shipped to Asia as the European market was already saturated.

Surging Exports

Analysts and trade sources mentioned that the surplus inventories, increased refinery operations, and a slight decline in domestic consumption allowed for more cargoes to be exported. Indian refiners smartly redirected their focus towards Asia, capitalizing on the European market saturation for diesel cargoes.

But hold on, as we head into the summer travel season in the northern hemisphere, there might be some tough competition from West Asian suppliers.

According to energy intelligence firm Vortexa, India’s **diesel exports** remained steady compared to last year but surged 17% on a monthly basis to 2.23 million tonnes. Additionally, **petrol exports** jumped around 6% both annually and monthly to 1.50 million tonnes.

The Petroleum Planning and Analysis Cell (PPAC) reported diesel exports at 2.14 million tonnes in May, up from 2 million tonnes in April. **Petrol exports** stood at 1.23 million tonnes in May, compared to 1.18 million tonnes in April.

Africa Calling

India’s gasoline exports to Africa also witnessed a lift, as lower supplies from the Middle East and South-East Asia created opportunities for more exports from India.

In terms of demand for auto fuels during the summer travel season, US gasoline imports have risen as refiners prepare for the peak driving season. European imports have seen a slight increase year-on-year, but weak diesel margins indicate an abundance of supplies in the region.

Challenges Ahead

Looking ahead, Indian diesel and petrol exports might face stiff competition from West Asian and African refiners in the coming months. The summer season typically spans from May to September, bringing in heightened demand for fuels.

However, uncertainties loom around the strength of this demand. Indian diesel and gasoil exports to Europe are facing strong competition from rising West Asian supplies. Additionally, finished gasoline exports to Africa might see a hit with the launch of Nigeria’s Dangote refinery later in the year.

Refining Success

According to PPAC, India saw higher inventories of petrol and diesel at the start of May, with diesel stocks witnessing a build-up in April.

In terms of production and consumption, diesel production and usage stood at 10 million tonnes and 8.4 million tonnes, respectively. For petrol, output and consumption were reported at 4.1 million tonnes and 3.4 million tonnes.

PPAC noted a slight dip in petroleum product consumption in May with 20.5 million tonnes being consumed, which was a 1% decrease from the previous year. However, on a monthly basis, consumption showed a 3% increase.

Indian refiners also processed higher quantities of crude oil in May, with total crude oil processing seeing a 1.3% jump annually and a 6.5% increase on a monthly basis. Production of petroleum products also saw a rise of 0.5% year-on-year and 2.6% month-on-month during May.

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