India: Domestic pet coke prices vary widely across refineries

It is widely accepted that petroleum coke price of Reliance Industries Limited (RIL) is referred by most of the Indian domestic suppliers for comparative purpose. It is also considered as a benchmark by various cement manufacturers, who are the major consumers of pet coke. This is because of the fact that RIL has so far been the largest producer of pet coke with almost 50% share of production within the country.

However, after commissioning of RIL’s gasification unit, the company has started self-consuming a certain portion of its output. The consumption has gradually increased as more units of gasification have stabilized. Hence at present, only a small portion of its pet coke production is being sold to the domestic customers which has resulted into a huge reduction in its market share in the domestic market and Indian Oil Corporation Limited (IOC) has become the largest seller of pet coke.

The domestic price of pet coke is based on CNF prices of imported pet coke along with other factors such as logistical costs involved, local marketing conditions and demand-supply scenarios at different refineries.

The prices of pet coke of various refineries have been compared with the pet coke price of RIL and represented graphically as below for the period Apr’20 to Dec’20. The RIL price has been taken as reference and variations have been shown accordingly. All prices shown are ‘general prices’ applicable at respective refineries, while specific pricings and other commercial offers are not considered.

Notably, Nayara Energy’s price, which is almost similar to RIL and HMEL prices, varies with IndianOil’s Panipat refinery by about INR 100/t.

On an average basis, Bharat Petroleum Corporation Limited (BPCL)’s Bina refinery price is highest as compared to RIL, followed by IndianOil’s Panipat refinery. Similarly, BPCL’s Kochi refinery price is the lowest as compared to RIL, followed by MRPL’s Mangalore refinery.

However, on a month-to-month basis the highest and lowest price variations are quite different. It is seen that price of BPCL’s Bina is the highest as compared to RIL price in May’20. It is followed by IndianOil’s Panipat. Further, the lowest price is IndianOil’s Paradip in Nov’20 and Dec’20 as compared to RIL, followed by MRPL’s Mangalore.

It is also observed that the prices of IndianOil’s Paradip and Haldia refineries have suddenly dropped below IndianOil’s Kochi refinery and Mangalore Refinery and Petrochemicals Limited (MRPL) in the current month.

The summary of price variations with RIL for Apr-Dec’20 is enumerated as follows: