The first quarter of the current fiscal witnessed an all-time high rise in India’s production of petroleum products. As per official data, the rise was 12.6 per cent during April-June against mere 3.6 per cent in the same period last year. On an average, in any quarter the increase in production of petroleum products is around 3-5 per cent.Senior government officials said Finance Minister P. Chidambaram, while reviewing the current state of the economy, had asked the petroleum ministry to explain the reasons behind this sudden increase.He was informed that the main reasons for this jump are two: increased sales volumes and less upliftment from Reliance Industries Lt (RIL), pending finalisation of its product offtake agreement with Indian Oil. Additionally, demand was up 17 per cent in the first quarter.‘‘In order to meet additional sales volume and less upliftment from RIL, higher crude processing by refineries was necessary. The upsurge in international crude oil prices in the first quarter led to higher refinery margins and almost all refineries processed crude beyond their rated capacities. Increased processing also resulted in higher margins for oil refining companies in the first quarter,’’ an official said.In its reply to the finance ministry, the nodal ministry has said, ‘‘crude imports during the first quarter increased by 16 per cent to 9,669 thousand metric tonne (tmt), against 8,342 tmt in the same period last fiscal. In order to avoid any disruption in demand, higher crude processing by refineries was necessary due to higher sales volume during the first quarter of 2004-05’’.Product sales, including exports, in the first quarter grew by 1,059 tmt to 12,827 tmt. Alongside, upliftment from RIL was lower by 730 tmt — at 632 tmt against 1,362 tmt in the same period in the previous fiscal.The country’s biggest refiner, Indian Oil, processed 12,793 tmt of crude in the first quarter against 10,778 tmt in the same period last fiscal. The increased processing of 2,015 tmt of crude gave 1,854 tmt of petroleum products.
