MRPL seeks rare low sulphur fuel oil for May

This, to meet pollution standards of Karnataka

Mangalore Refinery and Petrochemicals is seeking a rare cargo of low sulphur fuel oil (LSFO) to meet pollution standards of Karnataka, a company source said on Monday.

The 25,000-tonne LSFO cargo to be delivered over the second half of May will be for the refinery's own consumption, and purchased on an on-demand basis, said the source, who declined to be identified as he was not authorised to speak to media.

MRPL needs to stay under maximum sulphur limits on domestic production, "which would necessitate a LSFO import", said a Singapore-based fuel oil trader.

This could be due to increased output of higher sulphur refined products such as bitumen, which is used to build roads and demand for which rises over March to May, the trader added.

Trade sources said the LSFO purchase could also be the result of refinery upgrades that have reduced MRPL's fuel oil production.

"We are surprised they are buying LSFO. They are an exporter of high sulphur fuel oil, bunker grades," said another Singapore-based oil trader.

While MRPL used to export one to two cargoes of high sulphur fuel oil and vacuum gasoil a month, shipments have been sporadic since late last year after its refinery upgrade.

MRPL planned to shut its 120,000 barrel per day crude distillation unit for about 10 days from early April for maintenance.

MRPL operates a 300,000 bpd refinery in Karnataka.