State-owned Hindustan Petroleum Corp Ltd (HPCL) today reported a 22 per cent rise in standalone net profit for the third quarter on back of higher refinery margins and inventory gains. Net profit of Rs 1,950 crore in October-December 2017 was higher than Rs 1,590 crore in the same period of last fiscal. “The increase in profit is due to better refinery margin during the period on account of improved cracks and inventory gains,” HPCL Chairman and MD Mukesh K Surana told reporters here. The company, which operates two refineries in Mumbai and Visakh, earned $9.04 on turning crude oil into fuel in the third quarter as compared to $6.38 per barrel gross refining margin in the year-ago period.
Surana said the company made an inventory gain of Rs 1,477 crore. Inventory gain arise when a company buys crude oil at a particular price but by the time it is able to transport it and turn it into fuel, petroleum products have moved up. And since retail prices are liked to international product prices the company makes an inventory gain. In case of reverse, the company makes an inventory loss. He said turnover rose to Rs 62,832 crore from Rs 55,471 crore in the previous year.
HPCL’s two refineries processed 4.52 million tonnes of crude during October-December as against 4.66 million tonnes a year ago. Domestic sales of petroleum product rose 3.4 per cent to 26.80 million tonnes with petrol showing a 7.1 per cent growth, diesel 2.3 per cent, LPG 9.2 per cent and jet fuel growing by 7.7 per cent, he said. HPCL board declared an interim dividend of Rs 14.50 per share, resulting in a total payout of Rs 2,659 crore, including dividend distribution tax, Surana added.