INDIAN REFINERS HIT 100% UTILISATION AMID DIESEL SHORTAGE

A global diesel shortage is creating an opportunity for Indian refiners as buyers seek alternative suppliers. What's driving the shortage? • Russia: Ukrainian attacks on refineries have disrupted production and exports. • China: Restrictions on refined fuel exports have cut global supplies. • West Asia: Geopolitical tensions have disrupted energy supply chains. India capitalises on the opportunity According to Kpler, India's diesel exports averaged 7.1 lakh bpd (Oct 1–29), a 13-month high, up 19.6% MoM and 8.1% YoY. India is the world's second-largest seaborne diesel exporter after the US. Major exporters:

accounts for nearly 78% of India's diesel exports, followed by IOC (7.5%), Nayara Energy (5.6%), MRPL (5.4%) and HPCL (3.7%). Why are refiners benefiting? The key factor is the diesel crack spread -the difference between diesel selling prices and crude oil costs. When diesel prices rise faster than crude, refining margins improve. Higher exports also boost refinery utilisation and international realisations. Impact on the Indian economy Higher exports generate foreign exchange and partly offset crude import costs. However, prolonged high diesel prices can raise transportation, agricultural and manufacturing costs, adding to inflationary pressure. Kpler estimates exports could moderate to 5-5.5 lakh bpd in Nov-Dec, as festive transportation and agricultural activity lift domestic demand. A recovery to 5.5-6 lakh bpd is possible in Q1 2027. Investor Takeaway The development benefits Reliance Industries, IOC, Nayara Energy, HPCL and MRPL, as stronger exports and refining margins can support near-term ***** investors should distinguish temporary gains from sustainable earnings growth. Key indicators: Diesel crack spreads, crude procurement costs, export volumes, refinery utilisation and domestic fuel demand. The key question: Can higher refining margins sustain themselves, or are they a temporary benefit of global supply disruptions?