Kuala Lumpur: State-owned refiner Bharat Petroleum Corp. Ltd (BPCL) will continue to buy crude from Iran this fiscal year at 250,000 tonnes, its chairman said on Tuesday, dismissing earlier reports that it may stop the purchase.
The refiner is also expected to start production in the first quarter next year from its new 120,000 barrels per day (bpd) Bina refinery in Madhya Pradesh, and output is set to hit 5.5 million tonnes a year from then, said Ashok Sinha, BPCL managing director.
Asked if the refiner is buying Iranian crude this year, Sinha said, “That is the plan.”
“Even though Iranian grades are not ideal for BPCL’s refining, they are necessary in order to diversify its crude sources,” he told Reuters on the sidelines of the Asia Oil and Gas Conference.
BPCL renews the supply contract on a yearly basis.
Sinha also said that BPCL’s oil products marketing margin has fallen to around $1 (Rs47.60) per barrel within the past two weeks, from the usual $1-1.5 range, due to higher global crude prices.
“It’s the marketing margins that’s getting squeezed at the moment... The problem is not so much the refining side,” he said.
BPCL had earlier scheduled for the refinery in Bina to be ready by end-2009.