It's a double whammy for Reliance Industries. Not only have petrochemical margins dwindled but gross refining margins (GRM) have also fallen sharply in the last two months.
One report suggests that the company recorded negative refining margins in October and November and that the GRM for the quarter ending December 2008 would be considerably lower than the $15.40/bbl margin in the same period last year.
Reliance, though, is in a better position than its peers as it operates a complex refinery which provides it the flexibility to adjust its product mix to maximise returns.
But Reliance must be praying for an early improvement in GRMs as its new refinery at Jamnagar is in the process of being commissioned. The 580,000 bbls/day export oriented refinery is expected to be fully operational by March 2009 while trial runs are likely to start in the next two weeks.