State-run Hindustan Petroleum Corporation Ltd (HPCL) has posted an 86 per cent rise in net profit for the first quarter of the current financial year to Rs 17.19 billion backed by higher refining margins.
This is compared to a net profit of Rs 9.25 billion during the April to June quarter of 2017-18. The company's revenue also increased to Rs 729.23 billion as compared Rs 598.91 billion last year. The combined gross refinery margin during the quarter was $7.15 a barrel versus $5.86 a barrel during the corresponding quarter last year.
"The increase in profit is primarily due to higher refining margins due to inventory gains and also due to increased refining throughput and sales volume compared to last year," HPCL Chairman and Managing Director M K Surana told the media. During the quarter under review, the company had inventory gains to the tune of Rs 19 billion in refining and marketing.
During the quarter, crude prices have increased to $73 a barrel as against $49.8 a barrel during the first quarter of 2017-18. However, the impact of lower cracks was to the extent of $3.3 a barrel.
The company's refineries at Mumbai and Visakh processed 4.52 million tonne (MT) from April to June this year, compared to 4.49 MT last year. During the quarter, HPCL also achieved its highest quarterly sales volume of 9.63 MT, posting a growth of 5 per cent over last year. The sales of petrol during the quarter increased by 6.9 per cent, diesel by 2. 7 per cent, cooking gas by 11. 3 per cent, jet fuel by 9.9 per cent and lubes by 22.9 per cent during the quarter under review compared to last year.
HPCL's pipeline throughput increased to 5.45 MT posting a growth of 17 per cent over last year. Meanwhile, the company said that it is yet to get any instruction from the government in terms of stopping Iran crude imports, on the back of the US sanctions. "We do not import much Iran crude. Our contract for the current financial year was around 1 MT, out of which we have already imported 0.4 MT," Surana added.
The company is set to automate all its 15,127 retail outlets by the end of 2018. For the current financial year, the company has planned a capital expenditure to the tune of Rs 84 billion in various projects across refineries and petrochemicals, marketing, pipelines and natural gas. The company has also got authorisation from the Petroleum and Natural Gas Regulatory Board (PNGRB) to set up city gas distribution networks in Kolhapur (Maharashtra) and Ambala-Kurukshetra (Haryana) in joint venture with Oil India.