BPCL, which sourced about 37 per cent of its crude from Russia in the July-September quarter, has continued to diversify its procurement as geopolitical tensions disrupt shipping routes and push up freight and insurance costs. The company has nevertheless secured sufficient crude to sustain refinery operations, company’s Director (Finance) Vetsa Ramakrishna Gupta said.
New Delhi: State owned Bharat Petroleum Corporation Ltd (BPCL) expects Russian crude purchases to decline in November as higher freight costs erode the grades’ price advantage, while Middle Eastern grades have become more commercially viable, a senior company executive said Monday.
“We are getting the full volume, but there are challenges,” Director (Finance) Vetsa Ramakrishna Gupta told analysts on an earnings call, adding Russian cargoes were “significantly reduced” for November because of higher freight costs.
BPCL, which sourced about 37 per cent of its crude from Russia in the July-September quarter, has continued to diversify its procurement as geopolitical tensions disrupt shipping routes and push up freight and insurance costs. The company has nevertheless secured sufficient crude to sustain refinery operations, he said.
Russian volumes in November would be lower because Middle Eastern grades are more commercially viable compared to Russian grades, Gupta said.
Russian cargoes were “significantly reduced” for November because of higher freight costs, Gupta said
In the July-to-September quarter, Russian crude was about 37% of BPCL’s crude sourcing mix
BPCL said supplies from the Middle East had increased compared with the first quarter and that it expected higher volumes from the region in October and November.
India’s imports of Middle Eastern crude oil surged in September, returning to pre-war levels, while its refiners cut back purchases of Russian oil amid stiff competition with China, ship tracking data showed.
However, premiums for Russian crude have narrowed to about $1-$2 a barrel for December cargoes from $12-$13 a barrel in October, BPCL said
BPCL also warned refinery runs may moderate in the third quarter and fourth quarter as it undertakes a planned 30-day shutdown of some units at its Mumbai refinery and a 30-to-40-day maintenance turnaround involving some units at Kochi refinery.
The company also said it plans to dilute at least a 30% stake in its proposed Andhra Pradesh refinery and petrochemicals project.