The company’s gross refining margins fell, earning only $0.04 from producing every barrel of refined products in the quarter, down from $0.75/barrel in Q1FY20.
State-run Hindustan Petroleum Corporation (HPCL) reported a net profit of Rs 2,813.8 crore on a standalone basis for the three months ended June 30, recording a 246.9% rise from the same period a year ago. The oil refining and marketing company attributed the rise in profit to higher capacity utilisation of its refineries and higher sales of LPG and other high margin products as it processed more crude oil purchased at lower rates.
While revenue fell 38.1% year-on-year (y-o-y) in Q1FY21 to Rs 46,670.1 crore, expenses—comprising mostly of crude oil—dropped by a sharper 42.1% to Rs 42,941.7 crore. “Instead of storing crude we stored more refined products, lowering our inventory losses,” said HPCL chairman Mukesh Kumar Surana. The inventory gain in the quarter was Rs 536 crore against losses of Rs 633 crore in the corresponding period a year ago.
The refineries at Mumbai and Visakh processed 3.97 million tonnes (MT) of low priced crude during the quarter, 0.05 MT more than the corresponding period last year, even as domestic sales volume fell 25.8% to 7.2 MT amid the lockdown to contain the outspread of the coronavirus. HPCL refineries registered a capacity utilisation of 101% during the period.
The company’s gross refining margins fell, earning only $0.04 from producing every barrel of refined products in the quarter, down from $0.75/barrel in Q1FY20. The refinery margins include the inventory losses. Sharp increase in demand for LPG was recorded during the lockdown period, when it supplied 12.5 lakhs cylinders per day to consumers on an average. HPCL exported of over 3,300 tonnes of lubes during the quarter.
After adding 231 new retail outlets in the fiscal, HPCL’s total network size amounts to 16,707. HPCL said that project works have resumed and upgradation of Visakh and Mumbai refineries are in progress. The 9-MMTPA greenfield refinery-cum-petrochemical complex project in Rajasthan is under execution, though construction activities had temporarily stalled due to covid disruptions.