4) Refining and Marketing
Reliance's Jamnagar Refinery Plant is the refinery in the world which is located in the Jamnagar Special Economic Zone (SEZ). This Plant has a capacity of 1.24 mbpd (Thousand Barrels Per Day).
Under the company's Refining business company produces the following products:
Propylene - it is used as raw material for polypropylene
LPG - it is used as Domestic, commercial, and industrial fuel
High-Speed Diesel/ Gasoline - it is used as a transport fuel
Naphtha - it is used as raw material for petrochemicals such as ethylene, propylene, and fertilizers and as fuel in power plants
Sulfur - it is used as raw material for fertilizers and pharmaceuticals
Under its Petroleum Retail business it has the following brands:
Reliance Gas - which sells Liquefied Petroleum Gas (LPG) Domestic, commercial and industrial fuel
Reliance Petroleum Retail - which sells Transportation Fuels Retail distribution of fuels
Auto LPG - which sells Auto LPG Auto fuel outlet
Trans Connect - which sells Fleet Management Services Fleet management solutions
A1 Plaza - which sells Highway Hospitality Services Highway food plaza
Qwik Mart - which sells Convenience Shopping Shopping of beverages, snacks gifts on highways
Refresh - which sells Foods Passenger amenities/food courts on highways
Reliance Aviation - which sells Jet/Aviation Turbine Fuel Aviation fuel
Relstar - which sells Lubricants Engine oil and lubricants
Reliance being the owner largest single-site refinery with a crude processing capacity of 1.24 mbpd and site complexity index of 21.1 it has much strategic and competitive strength:
It has the ability to run a large basket of crudes across the quality spectrum whilst being among the lowest cost refiners globally and has a flexible product slate with access to high-value markets. Supplemental energy cost of Commissioning of Petcoke Gasification complex has reduced significantly. It had continued enhancement of Diesel Hydro De- Sulphurisation capacity to capture favorable economics during IMO. It launched a niche diesel grade during IMO. The company had done commissioning of HPIB(High-purity isobutylene) unit for C4 value addition. The company had increased its domestic retail network to 1,398 outlets. The company had set up its 16 new crude grades processed, including opportunity crude grades from the North Sea, Latin America and Straight Run Fuel Oil (SRFO) / diluted bitumen, during IMO Company has strong logistics infrastructure with largest operating port and rail, road & pipeline connectivity Company had adequate time-chartered vessels cover during IMO to manage freight volatility. The company has trading offices across major trading hubs and tankages at key locations to capture the opportunity in the VUCA world.
Company in FY 2019-20 had done Refinery Sales of 72.6 MMT(Million Metric Tonne) out of which 13.4% of sales are Domestic, 41.9% of sales are Exports & 17.3% of sales is Captive.
Company in FY 2018-19 had done Refinery Sales of 71.7 MMT(Million Metric Tonne) out of which 15.6% of sales are Domestic, 39.1% of sales are Exports & 17.0% of sales is Captive.
During FY 2019-20, RIL's Petroleum Retail registered over 10% y-o-y growth in average outlet sales volume. RIL's has outperformed across all four quarters in retail diesel and gasoline sales. It registered a y-o-y growth of 9.8% in retail diesel and 14.7% in retail gasoline whereas -1.5% increase in retail diesel and 6.3% increase in retail gasoline for industry, respectively.
The company uses various strategies & campaigns to increase sales.
B2B
HSD(High-Speed Diesel) – DIRECT
Unlike the retail segment, the Bulk Diesel continued a very slow y-o-y growth of 0.4% despite the impact of shutdowns in March 2020. The industry segment continues to maintain the overall demand. During the year, RIL registered a y-o-y volume growth of 10.8% increasing market share to 8.8% despite expected demand contraction and margin pressure. Non-railway business registered an impressive 16% y-o-y growth.
The double-digit growth observed over 52 consecutive months or more than 4 years might have been stalled. Air-passenger traffic in India which is one of the world’s fastest-growing aviation markets rose to 9%. RIL's Aviation Turbine Fuel(ATF) is looking to increase its network to 45 locations as against 30 at the end of FY 2019-20 and is well geared to benefit from the growth in the Indian aviation market. 75% of RIL’s production of transportation fuels from DTA(Differential Thermal Analysis) refinery was absorbed in the Indian market during FY 2019-20. The company is focusing on Petcoke Gasification which is the world's largest and achieved steady growth. This year company has focused to maximise syngas availability of all gasifiers. RIL's Jamnagar petcoke gasification has achieved iconic status in the gasification universe.
The Petroleum industry can face or is facing some hurdle on the growth of electric vehicles both in public and private transportation, but this should be more than compensated by the growing spending on infrastructure activities by the Government of India (GOI) around their ambitions countrywide road connectivity and port-led development. If both projects get combined for inter and intra connectivity then it will sustain demand growth of petroleum products soon.
Financial
The company generated ₹3,93,988 crore Revenue in FY 2018-19 which decreased to ₹3,87,522 crore in FY 2019-20 which means that the company's this segment saw a -1.6% decline in revenue. The company generated ₹26,050 crore EBITDA in FY 2018-19 which decreased to ₹24,426 crores in FY 2019-20 which means that company's this segment saw a -6.1% decline in EBITDA. The company's margin in FY 2018-19 was 6.6% which declined to 6.3% in FY 2019-20. The company saw some decline in Revenue, EBITDA & margin in this segment because of the high fluctuation of oil prices. This segment's performance was also affected by GRM(Gross Refining Margin) of US$8.9/bbl.
In CY 2019 global oil demand growth at 0.8 mb/d(million barrels per day) was the lowest since 2011 due to global economic uncertainty and trade tensions, even Brent crude oil prices were at US$63.4/bbl in CY 2019 which saw a decline of 9.5% y-o-y. Oil prices in Q4 FY 2019-20 were highly affected. Q4 FY 2019-20 saw the lowest demand in FY 2019-20 as the demand was hit badly by Covid-19 in China. As the company's major portion of revenue is from Exports so global economic uncertainty can heavily affect the business.
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