Rampant Virus Forces Partial Shutdown At Indian Oil Refiner
An employee walks through an oil refinery complex in India. (Photographer: Dhiraj Singh/Bloomberg)

Rampant Virus Forces Partial Shutdown At Indian Oil Refiner

India’s Mangalore Refinery and Petrochemicals Ltd. has cut oil processing rates and will likely have to make an unplanned shutdown at one of its crude units as a deadly second Covid-19 wave pummels fuel demand.

The company reduced its refining capacity by 15% to 1.1 million tons in April and could trim rates even further next month, according to a person familiar with the matter, asking not to be identified as the information isn’t public. The rapidly spreading virus has already had an impact on demand, with fuel sales from the largest retailers sliding during the first half of this month.

India’s healthcare system is buckling under the strain of the virus resurgence, which has led to renewed restrictions in some areas. Refiners were forced to slash crude processing last year after the first wave led to a national lockdown and plummeting fuel consumption, filling storage tanks. MRPL may be forced to cut rates to 900,000 tons in May, down from the typical average of 1.3 million tons, the person said.

Nobody immediately responded to an email sent to MRPL’s press office on the matter. MRPL is a unit of of Oil and Natural Gas Corp.

India’s capital New Delhi is set for a weeklong lockdown from Monday night, while Mumbai is under strict restrictions that include a weekend lockdown and night curfew for the duration of April. Meanwhile, the country’s third-biggest fuel retailer -- Hindustan Petroleum Corp. -- hasn’t yet made a decision on cutting processing at its refineries, according to Chairman Mukesh Kumar Surana.

“The second wave may push back the complete recovery in gasoline and diesel to some extent,” he said. “Unless industry and construction works are shut, we still expect the demand to maintain at the level it has reached.”

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