One of the dominant themes in Asia’s oil products markets is the rise of Chinese fuel exports, so much so that the decline in shipments from India barely gets mentioned.
India has in recent years been a fairly major player in Asia’s market for refined products, given the presence of plants designed to take advantage of the country’s location between producers in the Middle East and consumers in the rest of Asia.
India’s Reliance Industries, the owner of the world’s biggest refining complex, operates the 1.2 million-barrels-per-day (bpd) Jamnagar refining complex, while Essar Oil has a 400,000-bpd plant at Vadinar, both of which are focused on supplying overseas markets.
But changing dynamics of the local fuel market mean selling fuel at home has become as profitable as shipping it out.
India has largely deregulated its fuel market, ending the subsidies on gasoline and diesel that made it difficult for private refiners like Reliance and Essar to compete with state-owned companies, which were often forced to run at losses.
A robust rise in domestic demand, versus a slower increase in the rest of Asia, also means a growing market in which to participate.
Domestic sales of all oil products in India were at 15.84 million tonnes in December, equivalent to about 4.09 million bpd, and up 8.2 percent from the same month a year earlier, according to calculations based on official data.