The Petcoke business in India is as usual post the National Green Tribunal (NGT) ordering closure of all industrial units using Petcoke without having necessary permission for using the fuel. The order is intended to control the rising pollution levels in the atmosphere due to the usage of Petcoke as a fuel by several industrial units in the country.
At the same time, the NGT has allowed two months for the industrial units to continue using the fuel, and during the timeframe, the tribunal has also directed the state governments in the country to formulate their respective guidelines for using the fuel.
The small scale units, which will be impacted by the order, are waiting for the state governments to announce their respective policies in the context, and they are hopeful of the guidelines to be tilted in their favor.
However, there seems to be no major impact on the demand for Petcoke in India after the order coming into effect as the major consumers of Petcoke, the cement companies, are equipped with anti-polluting mechanisms, and hence will be outside the purview of the order. Moreover, the demand for cement in the country is growing at a CAGR of 9%, signifying the production to increase further, which will trigger higher demand for Petcoke in the country in the future.
The order also is not likely to impact the pricing pattern for Petcoke as the Indian refineries set their ex-works prices on the basis of import price parity, which is dependent on price movements in the key international markets.
In India, all the refineries produce Petcoke as a by-product of Crude Oil refining. Petcoke production in the country in Apr’17 was at 1,059 ‘000MT. The key countries of import of the fuel into India are: USA and Saudi Arabia. In Apr’17, 0.92 MnT of Petcoke was imported into India from USA, and 0.12 MnT from Saudi Arabia.
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