Singapore GRM flat but RIL GRM up WoW last week:: BofA Merrill Lynch,

􀂄 Singapore GRM up 1% WoW; 2QTD GRM at 4-quarter high
Reuters’ Singapore GRM last week was up 1% WoW, at US$9.0/bbl. Singapore
GRM in 2Q FY13TD, at US$9.11/bbl, is the highest in 4 quarters, but flat YoY visà-
vis US$9.15/bbl in 2Q FY12.
Diesel & petrol cracks up but naphtha, LPG down WoW
Petrol cracks were up last week, at US$15.4/bbl, but are still 30% below the
2QTD high of US$21.8/bbl. Diesel cracks were up 5% WoW last week. Diesel
cracks are 13% below the 2QTD peak of US$22.7/bbl, but still strong, at
US$19.7/bbl. Naphtha and LPG cracks fell last week. They have fallen for 2
consecutive weeks now.

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RIL’s GRM up WoW; 2QTD GRM highest in 4 quarters
RIL’s theoretical GRM last week was up 6-11%, at US$10.8-11.4/bbl, mainly
boosted by a rise in the light-heavy crude spread. RIL’s gain last week from the
rise in diesel and petrol cracks was more than neutralized by a fall in naphtha,
LPG and jet fuel cracks. RIL’s theoretical GRM, at US$8.3-9.3/bbl in 2QTD, is at a
4-quarter high, but 8-18% YoY lower than US$10.1/bbl in 2Q FY12.
RILs’ GRM above Reuters’ Singapore GRM in 2QTD
RIL’s GRM was always above Singapore GRM until 1H FY12, but was below the
Singapore GRM in two of the last three quarters. In 2QTD, the higher end of RIL’s
theoretical GRM of US$9.3/bbl is above Reuters’ Singapore GRM of US$9.1/bbl.
Diesel strength to sustain, but not light-heavy crude spread
The light-heavy crude spread, which was weak in Aug’12, has strengthened in
Sept’12. The light-heavy crude spread has risen as fuel oil cracks fell with the
drop in Japanese demand post summer. However, as Japanese demand for fuel
oil rises in winter, the light-heavy crude spread is likely to weaken again.
However, diesel cracks are likely to remain strong, boosted by low inventories,
strong demand and heavy refinery maintenance (see Global Energy Weekly, 21
September 2012).
RIL’s 2Q FY13 profit up QoQ, but down YoY at 2QTD GRM
RIL’s 2QTD GRM is up QoQ, but down YoY. RIL should also gain from a 2% QoQ
and 21% YoY weaker INR. However, RIL’s 2QTD blended petrochemical margin
is down 9% QoQ and 21% YoY. RIL’s 2Q FY13 net profit works out to Rs50.9-
56.9bn (up 14-27% QoQ but down 0.3-11% YoY) at the 2QTD theoretical GRM.
R&M theoretical GRM up QoQ in 2QTD
BPCL and HPCL’s theoretical GRM in 2QTD, at US$5.2/bbl, is up QoQ, driven by
a rise in product cracks. 2Q GRM is also likely to be boosted by inventory gains.