Refiners rake in big profits from exports even as volumes shrink

economictimes.indiatimes.com:

India's refiners exported nearly 10% less diesel and petrol in 2022-23 than in the previous year although they gained in value terms, making 26% more in dollar and 35% more in rupee terms, helped by high global prices and a depreciated rupee. It came amid reports last year that the country's refiners were doubling down on exports to serve Europe, which was shunning Russian fuel. Diesel and petrol exports combined amounted to $42 billion (about ₹3,33,620 crore) in 2022-23, securing higher profits to fuel exporters, mainly private sector refiners, and foreign exchange benefits to the country, according to the petroleum and natural gas ministry data.

«Indian refiners were merely shuffling barrels,» an industry executive said on condition of anonymity, adding that exporters probably only shifted supply from Asian markets to Europe.A booming domestic market — India's consumption of petrol and diesel expanded 14% and 12% year-on-year, respectively, in 2022-23 — also slowed the exports. «You can't quickly increase your refining capacity. So, you have a finite domestic supply and a growing domestic market to serve,» said the executive.

Diesel and petrol are mainly exported by private sector refiners which also sell a huge volume to state companies at international prices to meet domestic demand. Private sector refiners operate a small network of filling stations, which cut fuel sales last year to avoid losses after state oil companies froze retail prices. While their retail sales dropped, private refiners continued to supply fuel to state companies at international prices, the executive said.