Indian Oil defers Koyali units' shutdown to March-April

Wants to step up production to benefit from falling crude prices

Indian Oil Corp has deferred a planned shutdown of key units at its Koyali refinery in Gujarat to March-April 2015 from around October this year to capitalize on sliding crude prices, two company sources said on Thursday.

IOC, the country's biggest refiner, had initially planned maintenance shutdowns of a cooling tower, the fluid catalytic cracker and other facilities at Koyali in September-October.

State-run IOC had already cut throughput at five refineries in September after heavy rains curbed demand for diesel in northern and eastern regions of the country.

It now wants to make up the shortfall and also step up production to benefit from falling crude prices, which will boost its refining margins, the sources, who had direct knowledge of IOC's production plans, said.

 

"You don't know when this declining trend in crude oil will stop, so we want to maximise our crude processing now and gain if product prices go up," said one of the sources.

International oil benchmark Brent traded around $80 a barrel on Thursday, near its lowest since 2010. Crude has slumped more than 30% since June on worries about ample supply and weakening demand.

IOC's head of refineries Sanjiv Singh could not be reached immediately for comments.

The maintenance shutdown in March-April means most of the five crude units at Koyali, which has a refining capacity of 274,000 barrels per day (bpd), will not operate for 10-30 days.