Coronavirus impact: IndianOil realigns production after LPG demand rise

In wake of the coronavirus (COVID-19) outbreak in the country, Indian Oil Corporation (IndianOil) has seen a reduction in demand for transport fuel, while that for cooking gas has risen. The country's biggest refiner and petroleum retailer has, however, reduced crude oil throughput at most of its refineries by 25-30 per cent.

IndianOil sells about 300,000 cylinders every day and has a refining capacity of about 81 million tonnes. 

Though IndianOil did not furnish the number for increase in liquefied petroleum gas (LPG) demand, a representative of the All India Bharat Gas Distributors Association said LPG cylinder bookings have increased by around 50 per cent in the past few days. Some of this could be due to panic buying, which has impacted availability of essential food items. "We are also running short on delivery staff because of the lockdown. It is difficult handle additional load," he added.

"There has been a rise of 2 per cent to 3 per cent in LPG demand, mostly owing to panic buy. We are now however seeing it normalise. Supply of all services remains unaffected," said an official from IOC who did not wish to be identified.

Though cooking gas and petroleum products come under essential services, workers across sectors are finding it difficult to reach their workplace. A spokesperson of Bharat Petroleum Corporation confirmed there was rise in bookings due to panic buying. "Our supply services remain unaffected," he clarified.

To meet the rising demand for LPG, IndianOil is taking steps to increase LPG production at its major refineries by optimising operations, improving yield in LPG producing units like FCC/Indmax, the company said in a statement.  Bottling plant operations and LPG refill deliveries are being streamlined accordingly.

IndianOil further added the demand for petroleum products, like petrol, diesel, fuel oil, bitumen, etc, have reduced substantially. The demand for aviation turbine fuel has also come down sharply due to suspension of flights, the statement said.

India is likely to see a drop of 5-10 per cent in fuel sales volume during 2019-20 owing to COVID-19 restrictions. With the 21-day nationwide shutdown in place, the decline in purchase of petrol, diesel, and jet fuel is set to dampen the annual consumption figures of 2020-21 as well.