For 16-31 March the refining margin was US$8.6/bbl due to the shutdown of 1.4mbpd refining capacity in Japan. In 4QFY11 it was US$7.4 compared with US$5.5 in 3QFY11, on continued strength in middle-distillate cracks. Based on average global gasoil and gasoline prices during 16-31 March, auto-fuel under-recoveries for 1-15 Apr are likely to be `14.1/litre since losses on diesel rose to `15.8/litre.
n Strength in refining margins continues. The refining margin for 16-31 March was US$8.6/bbl due to the shutdown of 1.4mbpd refining capacity in Japan. For 4QFY11 it is US$7.4 compared with US$5.5 in 3QFY11, on the continued strength in middle-distillate cracks. We estimate that margin would average US$4.75/bbl in FY12 and US$5.5 in FY13. The Brent-Dubai spread was strong at US$6.4/bbl, up US$1.1 from the previous fortnight, adding to complex refiners' margins.
n Auto-fuel losses zoom. Based on average global gasoil and gasoline prices during 16-31 March, auto-fuel under-recoveries for 1-15 April are likely to be `14.1/litre vs. `13.7 the previous fortnight as losses on diesel rose to `15.8/litre. We estimate an auto-fuel breakeven crude price at US$74.5/bbl, flat from the previous fortnight.
n Crude price rally continues on Mid-East concerns. For 16-31 March, Brent crude was US$114.9/bbl, up US$0.9 from the previous fortnight, on account of the unrest in the Middle East that could trigger supply disruptions in crude oil.
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