Bharat Petroleum Corporation Ltd (BPCL) is changing its policy regarding surplus production. The petroleum major is looking to establish a regular international market for its petroleum products. The change comes as the company heads towards privatisation and tries to navigate the pandemic-hit petroleum demand situation in India.

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“BPCL is migrating from the current practice of exports based on supply-demand imbalance to planned and regular exports of petroleum products on a sustained basis, thereby establishing a regular market for its products in the international market," the company said in its annual report.

The company said it is working on the finer details of the procedure and strategy for regular exports. Previously, BPCL had only exported its products when the demand conditions in the domestic market did not match the supply-side equation. BPCL has already set up an International Trade and Risk Management (ITRM) desk for all imports and exports.

The current fuel demand in India, especially for automotive fuel, has still not recovered to pre-COVID-19 levels. As a result, oil manufacturing companies (OMCs) have been forced to operate at 75 percent of their overall capacity against the expected 90 percent.

Also read: BPCL privatisation may get delayed: Fitch Ratings

“Today the predicament for refiners is how to utilise their capacities to the maximum despite a low demand. So they are left with surplus and instead of selling that surplus at a lesser value, they can convert it into a contracted sale for users," said a senior refinery official told Mint.

While India is a net importer of fuel, India’s exports of petroleum products have continued to grow. Petroleum and energy sector exports constitute one of the 80 goods that make up more than 50 percent of the country’s export value. The continuing volatility of petroleum products takes its toll on India’s total exports.

(Edited by : Shoma Bhattacharjee)