Indian refiner BPCL sees further cuts in oil OSPs as fuel margins drop
Bharat Petroleum Corp, India’s third-biggest refiner, expects Middle Eastern producers to cut the official selling prices (OSPs) of their crude in coming months to reflect lower margins on fuel sales, its head of finance said . Lower fuel cracks – the difference between the cost of crude oil and refined product sales – are hitting the profitability of refiners globally. Complex refining margins in Asia have dropped by half to USD 4.10 per barrel as of July 19 compared with about USD 8.20 per barrel in February. “Compared to April-May the OSPs are moderate and these OSPs will be further moderated because cracks are on lower side,” Vetsa Ramakrishna Gupta told an analysts call. “I don’t think OSP premiums will be on higher side when cracks are on lower side,” he said. BPCL on Friday said its net profit for the three months ended on June 30 fell 71% from a year earlier to 30.15 billion Indian rupees (USD 360 million), partly due to lower margins. Earlier this month, Saudi Aramco cut prices for crude to Asia a second straight month, with its flagship Arab Light crude price for August loadings at its lowest since March. [CRU/OSP]
Oil Ministry announces plans for energy security fund
Oil Minister Hardeep Singh Puri on Saturday said that the ministry will set up an energy security fund, emphasising that it will help domestic oil and gas firms stay relevant in the future. The Ministry of Oil and Natural Gas (MoPNG) held a day-long strategising session in Bangaluru on Saturday, holding deliberations with top ministry and CPSU officials on India’s energy mix for 2040. “Started the day with an engaging discussion with top officials of oil sector PSUs & @PetroleumMin on strategizing India’s energy mix for 2040 and creating an energy security fund which are crucial for keeping our oil companies relevant in the future. These discussions will show the way forward to India’s journey towards energy sufficiency under the leadership of PM @narendramodi Ji & prepare our energy sector for the future,” Puri tweeted on X. According to different global outlooks and PPAC’s transition scenario, India’s CAGR growth from 2022 to 2040 is estimated at 3 per cent, with the share of oil in total Primary Energy at 41 per cent in 2040. The integration of refineries and petrochemicals into an oil-to-chemical model is the way forward for the industry. This will not only enhance efficiency but also create new opportunities, he added. The Minister did not provide any details on the fund or how it will be utilised. However, sources said that the fund could be used to acquire oil and gas assets in foreign countries. Rare earth minerals The CPSUs under the charge of MoPNG will now explore rare earth minerals. The Minister emphasised that oil and gas companies have the prowess to extract and refine natural resources as demand for renewable energy and battery storage intensifies. “We will also assess the need to acquire rare earth minerals. Discussed the sources, value chain, domestic and international reserves and the way forward for our oil companies to engage in mining of rare earth minerals in our brainstorming session today,” he added. Gas-based economy Puri noted that India’s natural gas consumption has risen steadily to 187 million standard cubic meters per day (MSCMD) in FY24 from 137 MSCMD in FY15. “Under the visionary leadership of PM @narendramodi Ji, we are exploring new pathways and initiatives to move towards a cleaner, greener, more affordable fuel, natural gas. In our brainstorming session, we discussed key drivers of global LNG demand, forecasts of LNG shipping, LNG terminals demand assessment and key policy drivers necessary to push the transition,” he added. Many states such as Assam, Andhra Pradesh, Maharashtra and others have taken the progressive and visionary step to reduce VAT on natural gas, the minister said, adding that he hopes that more states will reduce VAT on natural gas as it will help in movement towards a gas-based economy.
India supasses United States to have 15 per cent blended fuel as base fuel last month: Hardeep Singh Puri
Under PM Narendra Modi’s leadership, India has even surpassed United States to have a 15% blended fuel as base fuel, last month, Union Minister for Petroleum and Natural Gas, Hardeep Singh Puri said on Saturday. Union Minister engaged in discussion with top officials of oil sector PSUs & Petroleum Ministry on strategizing India’s energy mix for 2040 and creating an energy security fund which are crucial for keeping our oil companies relevant in the future. He had an in-depth discussion to examine and track the availability of feedstock, the roadmap beyond E20, biodiesel production process, and significance of promoting both ethanol and biodiesel blending. He said, “Over the past decade, India has made remarkable strides in ethanol blending. We achieved 10% ethanol blending 5 months in advance in June 2022 & also advanced availability of E20 blend by 5 years to 2025. 20% ethanol blended fuel is now available at more than 12,000 retail outlets. While before 2014 India managed only 1.4% ethanol blending.” “Since May this year, OMCs have begun dispensing E15 as a base fuel. Expanding our ethanol blending program and promoting biodiesel blending are crucial steps towards achieving a greener and more sustainable energy sector.” Puri further added. According to the Petroleum Planning & Analysis Cell (PPAC) Monthly Ready Reckoner report, Ethanol blending with Petrol was achieved at 15.90 per cent during June 2024 and cumulative ethanol blending during November 2023-June 2024 was 13.0 per cent.
Cost escalation of Mozambique LNG project likely around $3.5-4 billion: BPCL
State-run Bharat Petroleum Corporation (BPCL) said on Saturday that it expects cost escalation of $3.5-4 billion in the Total Energies-led liquefied natural gas (LNG) project in Cabo Delgado province in Mozambique.