BPCL Russian crude purchases will fall in November, finance director Vetsa Ramakrishna Gupta told analysts on Monday. In his view, higher freight and weaker offers now make Middle East grades cheaper, he said.
Why BPCL Russian crude buying is falling
In the September quarter, Russian oil made up about 37% of BPCL’s crude. Next came Saudi Arabia with 19%, Abu Dhabi with 17%, the US with 9% and Oman with 6%. However, Gupta said BPCL had “significantly reduced” cargoes for November.
Above all, the price gap explains the shift. According to BPCL, the edge for Russian barrels narrowed to $1 to $2 a barrel for December cargoes, from $12 to $13 in October. Meanwhile, Gulf supply has improved. As a result, BPCL expects more Middle East oil in October and November.
Refinery work and LPG
Spot deals still make up around 67% of its buying. Moreover, the company held about 22 days of crude at the end of September. Runs may ease in the coming months. BPCL plans a 30-day shutdown at Mumbai and a 30-to-40-day turnaround at Kochi.
On LPG, losses should rise to INR328 ($3.46) a cylinder in November, from INR245 ($2.58) in October. In addition, BPCL plans to sell at least 30% of its planned Andhra Pradesh refinery. Read our report on its Q2 results.
For a deeper analysis, read: Russian Crude Loses Its Edge: Why BPCL Is Turning Back to the Gulf
