---

Refiner and bunker supplier Indian Oil Corporation Ltd. (IOC) has sold at least 205,000 tonnes of fuel oil for December loading - the highest monthly amount in over five years, market sources report.

The state-owned firm is said to have exported the unusually high volume of fuel oil due to low domestic demand and a higher processing capacity at its refining facility in Panipat.

The December figure is 85,000 tonnes, or 71 percent, higher than the refiner's export volumes of 120,000 tonnes in November.

In total, IOC is estimated to have exported 660,000 tonnes this year, or a monthly average of 55,000 tonnes. Volumes skyrocketed in November after a crude unit was upgraded at IOC's Panipat refinery and the facility began operating at 300,000 barrels per day.

In the same month IOC also increased exports from its Haldia plant to three to four 15,000-tonne lots of 180-centistoke (cst) having sold only two cargoes of 15,000 tonnes each since the beginning of the year.

Exports from IOC's Chennai refinery rose in December to three 30,000-tonne parcels, up from the usual two, and the company also sold two cargoes from Mumbai for the first time this year.

Local demand for fuel oil has decreased since power plants switched from using fuel oil to cheaper natural gas. Price levels in Singapore are also attractive due to the supply tightness as a result of low Western arbitrage volumes for three consecutive months until January.

IOC's January exports are expected to be high with fundamentals forecast to remain the same as they were for this month. However, despite the significant increase in fuel oil exports since November, Essar Oil remains the country's largest fuel oil exporter at 2.4 million tonnes, followed by Mangalore Refinery & Petrochemicals Ltd. (MRPL) at 1.4 million tonnes.

IOC operates refineries in Assam, Gujarat, West Bengal, Uttar Pradesh, Madras and Bihar and is the leading provider of fuel oil for the bunker market, supplying both marine fuel and lubricants to customers in all major Indian ports.