India Oil Corp reports 84% May run rate, down from 96% in April

London, (Quantum Commodity Intelligence) - Indian Oil Corporation has been running its refineries at 84% of capacity so far in May, down from 96% in April said the company's Chairman Wednesday, amid a crash in domestic demand, according to local media.

However, demand was still far healthier than at the peak of lockdowns in 2020, when fuel demand fell by 49% in April.

"Demand destruction is not to that extent. It is very much there but not to that extent," said Chairman S M Vaidya, adding that petrol and diesel sales have fallen 15-20 per cent while jet fuel demand remains at half of the pre-Covid level.

The state-owned company is India's largest refiner, operating a combined refining capacity of 80.7 million mt per year, more than a third of the country's total capacity.

The statement is the first public, official acknowledgement that refinery runs have fallen since the outbreak of a second way of Covid-19.

A slump in Indian exports following rate cuts has also contributed to stronger margins on distillate products in Asia's Singapore trading hub, according to Quantum data.

10ppm diesel cracks for June versus August cash Brent rose to $6.46/b Wednesday, with the front-month swaps slipping further into backwardation at $0.14/b, a sign of growing strength.

Jet kero cracks moved in tandem, with June at $4.13/b.