Surana energises HPCL Q1 revenue by 16% to ₹59,891 cr
Hindustan Petroleum Corp Ltd (HPCL) on Friday reported 56 per cent drop in the June quarter net profit on account of lower refining margins and inventory losses.
Net profit of the state-owned company in the April-June quarter was Rs 925 crore, lower than Rs 2,098 crore in the year-ago period.
"We had an inventory loss of Rs 1,595 crore in first quarter of current fiscal as compared to an inventory gain of Rs 1,935 crore in the corresponding period of the previous fiscal," HPCL Chairman and Managing Director M K Surana told reporters here.
The company earned $5.86 on turning every barrel of crude oil into fuel during April-June, 2017-18 as compared to a gross refining margin of $6.83 per barrel in the same period of 2016-17, he said.
Inventory loss occurs when the oil prices fall after procurement and before marketing.
For example, if crude oil is purchased at say $50 per barrel price, an inventory loss would arise if by the time it is refined and marketed the price falls below that. The loss would be booked as the market rates of products are fixed based on the current global crude oil price.
An inventory gain would be booked if reverse happens -- product prices rise after procurement and before marketing.
Revenue soared to Rs 59,891 crore from Rs 51,600 crore in the first quarter of the previous year.
He said HPCL's Mumbai and Visakh refineries processed 4.49 million tons of crude oil in the quarter, almost unchanged from the previous year.
"Both the refineries are supplying 100 per cent of BS-IV grade (Euro-IV emission norm compliant) petrol and diesel with effect from April 1, 2017," he said.
HPCL recorded highest ever market sale of 9.20 million tons of fuel in the quarter, 3.5 per cent higher than 8.89 million tons in Q1 of previous fiscal.
"The market sales growth of 3.5 per cent is higher than industry (PSU plus private) growth of 3.4 per cent. In the PSU category, HPCL has gained market share of 0.20 per cent," he said adding petrol sales rose 9 per cent while diesel was up 2.5 per cent.