MRPL will decrease exports as it increases its retail locations

16 Aug 2023 , 10:12 AM

In order to diversify its revenue streams, India’s Mangalore Refinery and Petrochemicals Ltd wants to phase out petroleum exports over the next two to three years while it grows its local retail network.

A 300,000 barrel per day coastal refinery is operated by MRPL, a state-controlled Oil and Natural Gas Corp subsidiary, in southern Karnataka state, mostly to feed the state refiners that control 90% of the country’s retail fuel outlets. The remaining barrels are exported.

According to Sanjay Varma of Reuters, MRPL intends to increase the number of its retail locations in southern India from the current 71 to 1800 by 2027.

‘When marketing margins are strong and refining margins are low, retailers earn handsomely. If we have marketing margins, that provides a natural hedge, according to Varma.

As we would like to boost volumes through our retail shops, our strategy is to pursue zero exports, according to Varma.

Because to the interruption, MRPL would reduce its purchases of oil from nations like Russia in August and September, according to Varma.

He said that MRPL did not intend to engage into a term contract for Russian oil as spot prices allowed ‘more flexibility’ to acquire less expensive supplies. ‘We don’t want to carry a higher crude inventory level,’ he said.

In 2016, MRPL revealed plans to increase the refinery’s capacity to 360,000 bpd. It is currently looking to put up oil-to-chemical facility with a view to creating speciality chemicals and active pharmaceutical components in light of an anticipated increase in local demand for petrochemicals, according to Varma.

In 6-7 months, the business hopes to have a thorough feasibility report.

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