India's Diesel Exports Jump as Mideast Tensions Rise
India's energy sector saw significant shifts in refined product exports during March, driven by Middle East tensions and changing profit margins. Diesel shipments climbed nearly 20%, reaching 12.90 million barrels from 10.74 million in February. This surge was directly tied to wider profit margins for diesel compared to gasoline.
Refiners Chase Profits: Diesel Up, Petrol Down
Refiners strategically adjusted operations to capitalize on better returns. The profitability gap between crude oil and refined diesel widened, encouraging higher diesel output and exports. Conversely, petrol exports dropped 33% to 8.31 million barrels. This decline, alongside stable petrol margins, saw refiners shift focus to boosting liquefied petroleum gas (LPG) production. This pivot aims to secure LPG supplies, a crucial import from the Gulf region, amid potential supply disruptions.
Export Taxes and Reliance's Dominance
To ensure domestic fuel availability as refiners rebalanced output, India introduced export levies on diesel and jet fuel. These duties are Rs 21.5 per liter for diesel and Rs 29.5 per liter for jet fuel, aimed at deterring private refiners from prioritizing exports. Reliance Industries was the primary exporter in March, accounting for about 75% of total refined fuel shipments. Despite the strong diesel export growth, India's overall refined petroleum product exports fell 8% to 31 million barrels in March, down from 33.67 million in February.