MUMBAI: India’s petroleum product exports slipped in 2014-15, the first time in six years, as domestic demand for products such as lubricants rose sharply and the home market also became more attractive because of the deregulation of diesel prices. Weak global demand, which have impacted exports across most sectors, also played a role.
India exported a total of 63.92 million tonnes (MT) of petroleum products such as petrol, diesel, kerosene, naphtha, aviation turbine fuel (ATF) and fuel oil for the year ended March 2015. This was 6% below 67.86 MT exported in the previous fiscal year and the first fall in exports in six years, according to Petroleum Planning and Analysis Cell (PPAC), a statistical body under the ministry of petroleum and natural gas (MoPNG).
The government freed diesel prices in October 2014, bringing private refiners such as Reliance Industries Ltd (RIL) and Essar Oil Ltd on par with the state-owned refiners who were earlier selling diesel at subsidized rates. This allowed private firms to reopen their retail fuel outlets and ramp up domestic retail sales of petrol and diesel.
“Opening up of the retail fuel market for private refiners was aided by an increased demand from the industrial sectors which consume naphtha and fuel oil. Also, an uptick in the automotive sector ensured that the sale of lubricants in the domestic market picked up, too,” said an analyst with a domestic brokerage on the condition of anonymity. He added since no new refining capacity came up in the last fiscal, the fall in exports clearly indicates that exporting refiners diverted their product towards the domestic market.
As per the PPAC data, export of naphtha, fuel oil and lubricants showed the maximum fall on a year-on-year basis: naphtha by 16%, fuel oil 23% and lubricants 65%. Export of other products such as liquefied petroleum gas (LPG), ATF and bitumen, too, saw a fall.
