HPCL's Visakha Refinery starts fuel oil exports to Far East

State-owned Hindustan Petroleum Corporation Limited's Visakha Refinery has started exporting fuel oil to the Far East countries, mainly due to the drop in demand for fuel oil in the domestic market.

"We have surplus production of nearly 60,000 to 70,000 tonnes of fuel oil every month. But due to the lack of demand for fuel oil in the domestic market, we are exporting the product to other countries even though the export prices are not attractive," PAB Raju, general manager of Visakha Refinery, told Business Standard.

Until last year, there was a huge demand for our fuel oil. Now that the demand has dropped in the domestic market, our inventory has only been piling up. Keeping this in mind, we have started exporting close to 70,000 tonnes of fuel oil every month despite the export prices being Rs 1,000-Rs 2,000 less than the domestic prices," he said.

"Visakha Refinery has exported around seven lakh tonnes of naphtha to other countries last year. Until 2000-01, the entire production of naphtha was sold in the domestic market only. Due to the availability of natural gas to fertiliser and other industries in this region, the demand for Visakha Refinery's naphtha reduced significantly. Due to this, the refinery had to export seven lakh tonnes of naphtha out of its total annual production of eight lakh tonnes last fiscal," Raju said.

"Visakha Refinery has a processing capacity of 7.5 million tonnes a year. During the last fiscal, we have processed 7.59 million tonnes of crude oil. If we are not able to sell our products in the domestic market due to lack of demand, we will not hesitate to export the products, including diesel and kerosene, to other countries," he said.

Visakha Refinery has been receiving about one million tonnes of crude oil from Ravva K-G basin and the remaining of the crude oil through imports.