Indian Oil seeks first diesel imports in 8 months

Indian Oil Corporation (IOC) is seeking imports of diesel for the first time in 8 months, ahead of expected cold weather in northern India, industry sources said on Tuesday. The state-owned refiner is seeking 60,000 tonnes of 320 ppm sulphur diesel for delivery into either Chennai, Vizag or Paradip over Jan.17-19 through a spot tender.The tender closes on Dec.22 and is valid until Dec.23. Indian Oil Corporation last imported about 350,000 tonnes of gasoil in April, they said.The reason for the imports are not clear but traders said that it could likely be in anticipation of a pick up in demand in January as the weather in north India gets colder, which in turn could boost demand for diesel for power generation for heating purposes, they said. It could also be in anticipation of increased demand for transport fuel during elections next year, when several India states go to the polls, an India-based trader said.A second trader said that it could likely be due to product imbalances in eastern India.“This happens occasionally when there are unexpected product shortages in the east and refiners enter spot market to correct the imbalance,” he said.Indian Oil Corporation officials could not be reached for comment on the matter. Indian state-owned refiners have been staying away from the international spot market to purchase diesel due to a weaker economy and increased output from new refineries. at Petroleum bought 40,000 tonnes of diesel from PetroChina in June to be delivered into Kochi while Hindustan Petroleum imported 32,000 tonnes from Trafigura in April. Both companies have not entered the spot market to import gasoil since.Bharat Oman Refinery Ltd’s 120,000 barrels per day Bina facility in central India started earlier this year and Hindustan Mittal Energy’s 180,000 bpd Bathinda plant in the northern Punjab state began operations in August.It is unclear why Indian Oil Corporation did not purchase the barrels from the private refiners in the domestic market.