Canalising agency Indian Oil Corporation (IOC) is still importing diesel, three months after the country was supposed to attain self-sufficiency, a cue that points to product availability projections having gone haywire. Industry sources say the answer lies in the tremendous jump in the price of the key input of petroleum refineries, crude oil.

The 160 per cent jump in crude oil prices over the last 12 months has practically eroded the gross margins of refineries around the world. At home petroleum companies have the added burden of 20 per cent duty on crude oil and administered prices of key petroleum products.

In a recentpresentation to the Union ministry for petroleum and natural gas, MRPL had indicated that its gross refinery margins had been negative during the fiscal that was coming to an end. The company had blamed the ``low international product prices in relation to crude prices'' for its woes.

The partial deregulation of oil prices at home has compelled petroleum refineries to pay ``import-parity'' prices for crude and receive ``import-parity prices'' for petroleum products. The import-parity price is computed by adding on customs duties to the the c.i.f (cost and freight) price of crude and petroleum products.

The boom in crude prices and the relatively softer increase in prices of petroleum products have sqeezed refinery margins enough to force petroleum companies to slashed production all over the world. The four export-oriented refineries in Singapore have reportedly cut back crude throughput to 47 per cent of their rated capacities.

Petroleum refining and marketing companies at home do not as yet admit tohaving trimmed down their refinery throughput, but the production of petro-products is already significantly lower than the target for the first nine months of the 1999-2000 fiscal. The pro-rated installed capacities of petroleum refineries jumped by 27 per cent between April and December 1999, but the actual throughput of refineries only increased by a little less than 22 per cent.

The 17 refineries in the country (including RPL and MRPL) together operated at 94.1 per cent of their installed capacity during the period, compared to 98.4 per cent between April and December 1998. As many as eight refineries resorted to shutdowns in November and December, which is a bit of a coincidence since the gross margins of petroleum refineries really took a beating after October last year.

Reliance Petroleum had issued a press release on January 11 to say that the commissioning of its 27 million tonne per annum capacity refinery at Jamnagar was complete. Since it had gone on stream in September however, the refineryhas processed 6.35 million tonne of crude and shutdown its crude distillation unit (CDU) I for 10 days between November 30 and December 10 last year. The capacity utilisation of the RPL unit was roughly 60 per cent.

Mangalore Refinery and Petrochemicals Limited utilised 142 per cent of the capacity of its three-million tonne refinery. The remaining six million tonne of capacity addition that was complete in September does not seem to have had any impact on the market so far.

The second phase of MRPL was commissioned on September 16 and shutdown for 17 days soon afterwards because of ``low product offtake.'' The three million tonne-per-year-capacity Numaligarh Refinery Limited (NRL) was shutdown ``for maintenance'' and operated at 4.5 per cent of its installed capacity during the nine months.

Indian Oil's newly commissioned refinery at Panipat (installed capacity six million tonne per annum) operated at 61 per cent capacity between April and December. The fire at the refinery forced a shutdown of itscrude distillation unit for 12 days beginning November 20.

Indian Oil's Gujarat refinery, which went through a massive capacity expansion, shutdown its atmospheric unit (AU) IV for 45 days and the AU units I, II and III for four days in November. Indian Oil's Mathura refinery had a heavy stock containment problem and its Guwahati refinery had an LDO containment problem.

Cochin Refineris Limited took down its crude distillatin unit and fluid catalytic cracking unit (FCCU) for ``annual turnaround jobs.'' Hindustan Petroleum Corporation Limited's (HPCL) Visakhapatnam refinery, the scene of a massive fire in 1998, had a delayed start-up of some of its units. The HPCL refinery operated at 92 per cent of its rated capacity during the first nine months of this fiscal. As a market watcher said ``the refineries seem to have had 101 problems, but the fact remains that crude throughput was much lower this year than planned.''

All the 17 refineries in the country were expected to have contributed 69.66 milliontonne of petroleum products, but processed only 61.06 million tonne in the end.