India to Continue Diesel Exports Amid Global Supply Disruptions

India will continue diesel exports even if the US introduces restrictions on overseas fuel sales, Oil Minister Hardeep Singh Puri said at the PAFI 13th Annual Forum in New Delhi, according to news reports. 

The government will not withdraw from existing export contracts, Puri said. He said India’s refining capacity has increased through years of investment, allowing refiners to supply domestic and overseas markets. 

Global Diesel Supplies Remain Tight 

The global diesel market has faced tighter supplies this year due to the US-Iran conflict in West Asia and the Russia-Ukraine war. Russia has also reduced most of its overseas diesel sales. 

Diesel prices outside the US have risen more sharply than crude prices. This has increased costs for truckers, farmers, and construction companies and added to inflationary pressure. 

India Accounts for About 10% of Shipments 

India has overtaken Russia this year as the second-largest supplier of seaborne diesel after the US, according to Kpler data. Indian shipments make up about 10% of global seaborne diesel supplies. 

US pump prices have reached record highs, leading Washington to examine possible restrictions on fuel exports. Additionally, the European Union has raised concerns over the possible effect on supplies. 

Refining Capacity Set to Reach 320 MTPA 

India’s refining capacity is around 267 million tonnes per annum (MTPA). Puri said it is expected to reach nearly 290 MTPA within a year and 320 MTPA by 2030-32. 

India has around 5.4 million barrels per day of refining capacity and imports nearly 90% of the crude it processes. Refined fuel exports exceed 1 million barrels per day. 

Mauritius Agreement Keeps Export Focus 

Puri cited Indian Oil Corp’s five-year agreement to supply fuel products to Mauritius. The first cargo under the agreement has already reached the island nation. 

He said cancelling such contracts could affect buyers’ confidence in Indian suppliers. Saudi Aramco and Abu Dhabi National Oil Co. are also in discussions to invest in Indian refining projects. 

Read More: India Expands LPG Production Ahead of Upcoming Festival Season! 

Conclusion 

India will continue its diesel exports while adding refining capacity over the coming years. The decision comes as supply disruptions keep the international diesel market under pressure. 

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