India’s diesel exports likely hit their lowest level in over a decade in April as major exporter Reliance cut refining output for maintenance at a time when domestic demand was robust, trade sources and analysts said.
India, one of Asia’s top-three diesel exporters, exported around 1.15 million metric tons (9.69 million barrels) of the industrial and transportation fuel in April, an average of data from LSEG, Kpler, Vortexa and two trade sources showed.
This would be the lowest since February 2012 and a significant drop from a nearly 1-1/2 year high of 2.83 million tons registered in March, according to official data.
Official export figures for April are due in the last week of May.
“The unexpectedly low outflows from India for April resulted in limited supplies heading for Asia and Europe,” LSEG Oil Research senior analyst Charles Ong wrote in a note.
The drop in India’s exports has partly supported Asia’s spot 10-ppm gasoil premiums for most of April to its highest level in more than three months, with values jumping from 16 cents to 90 cents per barrel.
Reliance Industries, operator of the world’s largest refining complex at Jamnagar in western India, shut some of its refining units for maintenance in April.
The company’s diesel exports slumped to 800,000 tons in April, according to two of the sources and LSEG.
Mangalore Refinery and Petrochemicals, which typically exports more than three 65,000-70,000-ton cargoes per month, sold only one cargo in April. The rest were likely sold domestically, one of refinery sources said.
Indian refiners were further encouraged by higher jet fuel margins to produce more aviation fuel than diesel, he added.
Front-month regrade values, the discount between jet fuel and 10ppm sulfur gasoil, narrowed in April to around 80 cents a barrel from more than $1 a barrel in March.
For May, exports are expected to rebound to nearly 2 million tons, two of the sources said, as Reliance resumes production.
However, MRPL will start maintenance at one of its crude units which will cap diesel exports , one of them said.
