New Delhi: Domestic oil producers, including Hindustan Petroleum and Indian Oil subsidiary Chennai Petroleum, are likely to see some recovery in their squeezed refinery margins this year.
“The refinery margins have improved in January. But in any case we can expect refinery margins to be between $6 and $8 per barrel against above $8 in 2007-08,” Chennai Petroleum Corp., managing director K.K. Acharya told reporters on the sidelines of the Petrotech-2009 conference.
Acharya said, “The refinery margins remained negative in the third quarter of this fiscal (October-December 2008). Though it was marginally negative in second quarter of 2008-09 (July-September), it would have impact on overall gross refinery margins during this financial year.
“If the (crude oil) prices stabilise, the gross refinery margins during the entire financial year can be slightly lower than $8 per barrel.
“We are not planning any cut in crude oil import in the prevailing situation rather we would ramp up import by one million barrel. We have been hit because naphtha exports have dipped by almost 50%. We have planned to expand our refinery capacity to 10.5 million tonnes from existing 9.5 million tonnes.”
Hindustan Petroleum chairman and managing director Arun Balakrishnan also confirmed gross refinery margins have moved northwards so far this month.
“Refinery margins have improved during this month. Before that in the past three months, refinery margins were low. The refinery margins have been ranging between $5 and $7 during the past three months.”
Crude oil prices have moved down from a high of $147 a barrel in July last year to below $40 per barrel last month.