Business Standard

Hindustan Petroleum Q3 net profit drops 63% on inventory loss

Hindustan Petroleum Corporation Ltd (HPCL) on Monday reported a 63 per cent decline in third quarter net profit as it booked inventory losses.

Hindustan Petroleum, oil marketing company, OMC

Photo: Bloomberg

Press Trust of India New Delhi
Hindustan Petroleum Corporation Ltd (HPCL) on Monday reported a 63 per cent decline in third quarter net profit as it booked inventory losses.
Net profit in October-December of Rs 869 crore compared with Rs 2,355 crore for the same period last year.
"The profit was affected primarily due to the price fluctuations in Q3 2021 leading to inventory losses compared to inventory gains in the corresponding period last year," HPCL Chairman and Managing Director M K Surana told reporters here.
While refusing to give inventory loss numbers, he said the loss was on the marketing side -- meaning it sold fuel at less than its cost.
This primarily would have been due to keeping petrol and diesel prices on hold despite international oil prices jumping above USD 90 per barrel.
The firm earned USD 6.39 on turning every barrel of crude oil into fuel in October-December 2021 as against a refining margin of USD 1.87 a barrel for the same period in the previous year.
Justifying the nearly three-month-long price freeze, Surana said crude oil prices, exchange rate, product prices have been volatile. "There is a lot of ups and downs, therefore daily changes will prove to be counterproductive to the purpose of daily price changes," he said, adding rates will over a period of time align with international prices.
"There is a sensitivity to prices therefore when prices are elevated there are concerns and so we are ensuring the least inconvenience to consumers," he said.
The already volatile crude oil market witnessed sharp price fluctuations with the crude prices continuing to trade at 7-year high levels at the end of January 2022 due to concerns over supply and ongoing geopolitical tensions.
He said with the recovery gaining traction, October-December 2021 quarter saw the petroleum product consumption in India echoing the pre-COVID levels.
During the period October-December 2021, sales rose to Rs 1,03,080 crore as compared to Rs 77,113 crore for the same period of the previous financial year.
Domestic sales of petroleum products of HPCL was 27.2 million tonnes against 25.4 million tonnes during the corresponding period of 2020-21, registering a growth of 7 per cent.
The sale of petrol increased by 14.6 per cent, HSD by 7.1 per cent and LPG by 2.9 per cent. The overall demand for petroleum products during April-December 2021 period was around 97 per cent of pre-pandemic demand during April-December 2019 period.
During the October-December 2021 period, HPCL refineries processed 4.24 million tonnes of crude as compared to 4 million tonnes during the corresponding period of the previous financial year.
Surana said HPCL is the first oil and gas company in India to place an order for an electrolyzer-based green hydrogen plant of 370 tonnes per annum capacity for its Visakh Refinery which is likely to be commissioned by December 2022.
HPCL has plans to have a green hydrogen capacity of around 24,000 tonnes per annum over a period of time.
It is also constructing a 100 kilolitre per day capacity 2G Bio ethanol refinery at Bhatinda with agri-waste as a feedstock and a 14 tonne per day capacity Compressed Bio-Gas plant at Badaun in Uttar Pradesh.
In addition, HPCL owns and operates two ethanol plants in Bihar through its subsidiary company.
HPCL has 101 MW capacity wind farms in Rajasthan and Maharashtra and a 48.80 MW solar power capacity.

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

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First Published: Jan 31 2022 | 8:07 PM IST

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