Mangalore Refinery Shifts Focus: Retail Expansion Over Exports

Mangalore Refinery and Petrochemicals Ltd (MRPL), a subsidiary of Oil and Natural Gas Corp (ONGC), is strategically phasing out fuel exports over the next two to three years. The company is focusing on expanding its local retail network in southern India, aiming to increase its retail outlets from around 71 to 1,800 by 2027. This shift is driven by the potential for more stable revenue from the retail sector, offering favourable marketing margins as a hedge against volatile refining margins.MRPL's exports of diesel and jet fuel have faced challenges due to maintenance shutdowns at other refiners, leading to increased demand for its products in recent months. The company plans to eliminate exports and route its volume through the growing retail network.For the current fiscal year ending on March 31, MRPL is targeting refinery operation at around 107-108% capacity, compared to 115% in the previous year. This includes a maintenance shutdown of a 60,000 bpd crude unit and secondary units for approximately 35-40 days, starting in late August. To manage the maintenance impact, MRPL plans to reduce crude imports, including from Russia, during August and September.MRPL is also exploring opportunities beyond refinery operations, with plans to set up an oil-to-chemical plant to produce specialty chemicals and pharmaceutical ingredients in response to increasing local demand. The company aims to receive a comprehensive feasibility report for this initiative within the next 6-7 months.This strategic shift showcases MRPL's adaptability to market dynamics, as it seeks to maximise revenue growth and enhance its role in India's energy landscape.