Industry Odisha Bureau, Oct 08: India’s diesel exports reached about 620,000 barrels a day in September, Kpler data show. Europe took nearly half as margins soared. Global supply disruptions widened the opening for Indian refiners.
Indian refiners shipped more diesel abroad in September than in any month for a year. Exports averaged about 620,000 barrels per day (bpd), according to Kpler. Europe was the biggest buyer, taking nearly half the volume.
The driver was price. Diesel was scarce worldwide, and refiners chased exceptional margins. Nikhil Dubey, Kpler’s lead refining analyst, tracked Singapore diesel cracks against Dubai crude. He said they ran above $60 a barrel in September. That, he said, gave refiners a strong reason to maximise diesel output.
A crack spread is the gap between a product’s price and crude’s cost. It is a gross measure, not net profit. Taxes, freight and operating costs still come out of it.
Europe leans on India
About 280,000 bpd went to Europe, almost 80% more than in August. Africa took roughly 200,000 bpd, the second-largest share. Asia received about 50,000 bpd and the Americas about 40,000 bpd. Another 50,000 bpd went to unidentified destinations. Kpler recorded no diesel cargoes to Russia, after some flows in the prior three months.
Europe still relies on imported diesel, with the US and Saudi Arabia among key suppliers. Dubey pointed to recent refinery disruptions in Saudi Arabia. Combined with tight Russian supply, that let India act as a swing supplier.
Global disruptions sharpened the squeeze. Benchmark diesel prices in September were double year-earlier levels, the report noted. The US-Iran war has disrupted Middle Eastern fuel flows. Russia has extended its diesel export ban through October. Ukrainian drone strikes have also cut Russian refinery output.
China then suspended most October fuel exports to rebuild domestic stocks. On 2 October, G7 leaders agreed to release 100 million barrels of diesel and crude. The release will run over four months.
India’s refiners are well placed to respond. Dubey said Gulf and Russian crude supplies offer a slate suited to diesel production. Indian refineries are also generally configured for high middle-distillate yields, he added. Middle distillates include diesel and jet fuel.
Tax shapes who gains
Gains are not shared evenly. India reintroduced windfall export duties on diesel in March, reviewing them every fortnight. The report put the diesel levy at about $37 a barrel in September. That erases a large slice of export margins for most refiners.
Reliance Industries’ export-only Jamnagar refinery is exempt. A senior official earlier attributed the exemption to judicial rulings. That unit is India’s main diesel exporter. Reliance’s domestic-focused refinery, Rosneft-backed Nayara Energy and state-run MRPL export smaller volumes.
These refiners also sell fuel to Indian Oil, Hindustan Petroleum and Bharat Petroleum. Such sales are usually priced at international levels minus the windfall tax.
