State-owned Hindustan Petroleum Corp Ltd (HPCL) today reported a 147 per cent jump in its second quarter net profit on account of higher refinery margins and inventory gains.
Net profit in July-September at Rs 1,735 crore was 147 per cent higher than Rs 701 crore in the same period a year ago, HPCL Chairman and Managing Director Mukesh K Surana told reporters here.
The company earned USD 7.61 on turning every barrel of crude oil into fuel in the quarter as compared to USD 3.23 per barrel gross refining margin in the same period a year ago.
"Throughput at both our refineries totalled 4.64 million tonnes as compared to 4.04 million tonnes last year," he said.
Also, the company had an inventory gain of Rs 792 crore in the quarter as compared to an inventory loss of Rs 550 crore.
Inventory gain accrues when a refinery buys crude oil at a particular price but by the time it is able to process it and turn it into fuel, the rates have gone up, helping it get higher price for the product. Inventory loss occurs when the reverse of this happens.
Gross sales increased to Rs 54,153 crore during July- September from Rs 47,750 crore in the same period last year.
"The increase in profit is due to higher crude throughput, better refinery margin, higher domestic market sales and inventory gains against inventory loss compared to the corresponding period of last year," he said.
During July-September 2017, the domestic sales of petroleum products increased 4.6 per cent to 8.37 million tonnes with petrol sales rising 7.1 per cent and diesel 4.4 per cent.
"HPCL continues to be No. 1 lube marketer of India and has become the first oil company from India to mark its presence in the lubricant market in Myanmar with launch of HP lubricants in two major cities of the country," he said.
Surana said as petrol, diesel and jet fuel (ATF) have been kept out of the Goods and Services Tax (GST), the company suffered a loss of Rs 90 crore as it was unable to take credit of tax paid on input.
HPCL's joint venture refinery at Bathinda in Punjab has completed expansion of capacity to 11.25 million tonnes from 9 million tonnes previously.
He said the expansion of Mumbai and Vizag refineries are on track.
HPCL is investing Rs 20,928 crore in expanding its Visakh refinery in Andhra Pradesh from 8.33 million tonnes per annum to 15 million tonnes by July 2020. Also, the Mumbai refinery is being expanded to 9.5 million tonnes a year from current 7.5 million tonnes at a cost of Rs 4,199 crore.
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