Operational flexibility to shift from domestic to the export market, along with higher petrochemical production helped Reliance Industries (RIL) operate at 90-100 per cent in April and May even during the lockdown.

The large public sector refiners operated at a combined 59 per cent average capacity in April.

RIL produced more chemicals than fuel as it saw good export demand for petrochemicals, especially polymers. The company’s oil-to-chemical business, which is being carved out as a separate company, has the operational flexibility to shift quickly from fuel to chemicals, domestic to exports. Another notable feature is feedstock flexibility.

According to data from the Union Ministry of Petroleum and Natural Gas, RIL's refinery utilisation in April was at 94.82 per cent, compared to Indian Oil Corporation (IOC)'s 53.17 per cent and Bharat Petroleum Corporation (BPCL)'s 70.08 per cent. IOC and BPCL's refinery production was hit due to low demand from transportation fuels like ATF, petrol and diesel. Hindustan Petroleum (HPCL) was the only public sector outlier with 100 per cent utilisation. A net buyer of refined products, HPCL concentrated on improving refinery throughput and reducing third party purchases.

Sources said, “Taking full advantage of global reach and deep customer connect, RIL quickly shifted towards significant exports and inverted business model, from 20 per cent exports earlier to 80 per cent exports currently. The shift took place within 10 days.”

It exported paraxylene to the US initially and China later. RIL plans to balance exports and ramp up domestic sales as the downstream industry reopens. Last weekend a vessel-load of 68,000 tonnes of polymers was exported to China. “This was the first time that such a high quantity of polymers was exported from India to China,” explained the source.

Queries sent to Reliance Industries on polymer exports and refining capacity utilisation during the lockdown did not elicit any response.

However, sources said that, in April 2019, out of 80,000 tonnes of total polymers exports, RIL’s share was 34,500 tonnes or 43 per cent. However, in April 2020 when most businesses were shut or working at low capacities due to lockdown, RIL exported 236,000 tonnes of polymers which is 95 per cent of the total polymers exports from India. The trend continued in first three weeks of May also, sources said.

For the domestic market, RIL’s production has shifted focus after the Covid pandemic on producing milk and food packaging material and PPE (personal protective equipment) segment where demand is high. With manpower housed near the plant, RIL did not face any shortage of workers, said sources.

Analysts agree that RIL’s petchem would have supported the overall refinery utilisation. “Naphtha produced is effectively used in captive consumption for petrochemicals production. A combination of naphtha, exports of transportation fuels, and sale of LPG to domestic public sector companies may have possibly ensured a higher utilisation for its refinery,” said a senior oil and gas analyst who did not wish to be identified.