It gives me immense pleasure to present the 68th annual report on the performance ofyour company for the year 2019-20. The year was historical for hpcl as government ofindia has conferred the coveted maharatna rs status to your company which entailsgreater operational and financial autonomy to the corporation. I wish to thank all ourshareholders for their continued trust all the employees and our business partners fortheir commitment and resilience and all our stakeholders for their continued support tomake hpcl reach this position.
For the global oil and gas industry the year gone by was challenging andunprecedented. Brent crude oil prices have witnessed high volatility in 2019-20 with priceranging from over us$ 70 per barrel to below us$ 20 per barrel. The crude prices witnessedan upward trend in the beginning of the financial year due to concerns about supplies asiranian export waivers were due to end and an opec+ production cut agreement took effect.Even though there was a downward trend in middle of 2019 due to fears about oil demandgrowth prices strengthened at end of 2019 due to positive sentiments on economy andreaching of long disputed trade agreement between us and china. However crude pricessoftened significantly since january 2020 largely driven by the economic contractioncaused by covid-19 coupled with the sudden increase in crude oil supply following thesuspension of previously agreed upon production cuts among opec and partner countries.
Indian economy grew by 4.2% in fy 2019-20 and remains to be one of the fastest growingmajor economies in the world. Spread of covid-19 and lockdowns imposed to contain theepidemic dampened the growth momentum in the last month of the financial year. Howeveragriculture sector recorded a higher growth in 2019-20 as compared to previous year. I inlater part of the financial year the pandemic covid-19 adversely affected several servicesectors such as trade tourism airlines and hospitality which has its i impact inpetroleum products demand also. India's annual fuel demand grew 0.2 percent in 2019-20its lowest growth rate in over two decades largely dragged down by a substantial 17.8percent decline in consumption in march 2020.
It gives me immense pride to inform that notwithstanding these developments and itsbusiness impacts your company delivered a robust performance in 201920 with highest eversales of 39.6 mmt. The company achieved gross sales of rs 286250 crore during the year.Profit after taxes (pat) was rs 2637 crore on standalone basis. Board of directors ofyour company has proposed payment of a final dividend of rs 9.75 per share for thefinancial year 2019-20.
During the challenging period of lockdowns to contain the pandemic hpcl continued itsoperations without any disruption to ensure availability of lpg petrol diesel and otherproducts for essential services and public while ensuring the safety and wellbeing of itsstakeholders and the workforce.
During 2019-20 both hpcl refineries at mumbai and visakh maintained robust physicalperformance with combined capacity utilisation of 108.7% and thruput of 17.18 mmt. Theupgradation of refineries to produce bs-VI compliant transportation fuels has beencompleted during the year. Refineries completed the rollout of bs-VI grade ms and hsdbefore the timelines stipulated by government of india. Mumbai refinery achieved highestever lobs (lube oil base stock) production with 478.1 tmt. Visakh refinery started theproduction of vlsfo (very low sulphur fuel oil with sulphur content less than 0.5%) tomeet the regulatory requirement of marpol. Maximising asset utilisation and reliabilityimprovement of refineries continues to be the key focus areas for your company.
Your company delivered an excellent marketing performance in 2019-20 and exceededvarious milestones achieved during previous years including registering the highest eversales of 39.6 mmt. The sales were achieved in the backdrop of intense competition andsubdued demand growth for petroleum products. In lpg and petrol sales the corporation hascrossed 7 mmt mark with growth of 7.3% and 4.7% respectively. In b2b segment the strategyof maximising volumes in the focus products helped the corporation to cross 1 mmt salesvolume in fuel oil (fo) diesel and bitumen individually for the fifth consecutive year.The corporation is the second largest lpg marketer in the country. In the highlycompetitive lubricant markets sales volume of 650 tmt has been achieved making thecorporation the number one lube marketer in india for seventh consecutive year. Inoverseas marketing of lubes your corporation is the largest exporter among indian omcswith highest ever export of 16.7 tmt in 2019-20.
Your company continues to lay strong emphasis on operational efficiency & costoptimisation with continuous implementation of measures for productivity enhancement witheffective usage of technology. Implementation of central optimized logistics assistant(cola) has ensured in supply chain optimisation by planning the tank truck scheduling froma central place for movement of product across india. During the year 20 strategiclocations were declared as smart rs terminals with automation and seamlessintegration of various processes. Mobile app hp buddy rs provides a common interfacewith dealers and transporters thus improving stakeholder's engagement convenience andproductivity in operations. Significant gains in overall through put performance andproductivity across the network of operating plants has been achieved in 2019-20. Yourcompany achieved highest ever bottling of cylinders in lpg plants and thruput in poloperations during the year.
Multipronged actions have been undertaken by the corporation to enhance safety in allfacets of operations with Provision of sops continual training of operating manpower andtechnology enabled monitoring practices and alarm systems. Mumbai refinery recorded thebest ever safety performance by achieving 27.52 safe million man-hours of safe operationas of 31st march 2020.
Hpcl recognises the importance of developing countrywide infrastructure & customertouch points to cater to the demand growth minimise the mismatch between regional supply& demand and seamless & cost efficient distribution of products across thecountry. Your company has significantly invested in expansion and upgradation ofrefineries and supply chain infrastructure with highest ever capital expenditure of overrs 16000 crore during 2019-20. The uran-chakan lpg pipeline project was commissionedduring the year which will reduce lpg tanker movement on mumbai-pune route substantially.Palanpur-vadodara product pipeline project was completed 6 months ahead of schedule and at90% of the approved cost. In addition capacity of existing pipelines were enhanced byover 6 mmt. The corporation commissioned its 50th lpg plant during the year and thecapacity of existing plants were augmented by 360 tmtpa. Last-mile delivery capability ofthe corporation was further enhanced with commissioning of 1194 new retail outlets and245 new lpg distributorships during the year taking the number of total retail outlets to16476 and number of total lpg distributors to 6110 as of 31st march 2020.
Your company is continuously expanding the business portfolio with greater presence inclean energy verticals of natural gas & renewables. Hpcl along with its joint ventureshas the authorisation for cgd presence in 34 districts covering 9 states in the country.Cng sales have commenced in sonipat geographical area (ga) in 2019-20 where hpcl issetting up the cgd network on standalone basis. During the year cng facilities wereprovided at 166 retail outlets taking the total number of retail outlets with cngfacilities to 471 ensuring availability of cleaner fuels and more choices to customers. Iam happy to inform that the construction of the 5 mmtpa jv lng regasification terminal atchhara port in gujarat is progressing well. Hpcl is actively participating in governmentof india's satat (sustainable alternative towards affordable transportation) initiativefor promotion of compressed bio gas. As of 31st march 2020 hpcl has issued 51 lois forsetting up of cbg plants with total estimated production capacity of 76 tmtpa.
Thrust on research & development remains to be of paramount importance for thecorporation reinforcing the focus in developing demonstrating and deploying novel &innovative products & technologies with persistent emphasis on rendering technicalsupport to its divisions. Continued focus in research and innovation across various areasin energy sector enabled your company to receive 30 patents during the year including 10international patents.
Your company is adopting emerging & innovative technologies to enhance customervalue and ensure safe operations. In retail outlets 100% automation has been achieved.Creation of real-time dashboards with the online data from the automated outlets withsuitable monitoring mechanism has enhanced the operational efficiencies. Entire retailoutlet network of your company has been enabled with digital payment facilities. Theintegrated payment system (ips) solution with integration of multiple payment systems withdispensing units at retail outlet ensures in delivering smart easy quick and multiplepayment options to the customers. Your company launched hp pay rs app during theyear which is an industry first unified payment solution for customers for various hpclproducts viz. motors fuels domestic lpg and lubricating oils. Implementation of customerrelationship management (crm) tool is ensuring enhanced customer orientation &superior service standards.
Your corporation is committed to the triple bottom line framework wherein equal focusis thrusted on financial social and environmental capitals to create greater businessvalues. Hpcl has always been at the forefront of environmental sustainability throughimplementation of various initiatives in the area of carbon footprint reduction energyefficiency water conservation waste management renewable energy etc. Towards reductionof carbon intensity in transportation sector both refineries of your company have beenupgraded to produce bs-VI compliant transportation fuel in 2019-20. Your company hasachieved supply & marketing of bs-VI fuels across the country by 31st march 2020. Theethanol blending program has recorded overall ethanol blending percentage (ebp) of 4.9% inpetrol during 2019-20. In addition hpcl recorded the blending of highest ever quantity (5crore litre) of biodiesel during 2019-20.
Your company is continuing its contribution towards nation building through effectiveimplementation of various socio economic development programmes initiated by government ofindia. To address the challenge of energy poverty your company has enabled clean energyaccess for over 2.1 crore low-income households by providing new lpg connections underpmuy as of 31st march 2020. To take forward government of india's flagship programme ofswachh bharat abhiyan around 1000 toilets were constructed/renovated during 2019-20. Aspart of corporate social responsibility (csr) plan your corporation has undertakenvarious activities during the year under the focus areas of childcare education healthcare skill development sports and environment & community development positivelyinfluencing the lives of less privileged with overall csr spend of rs 182 crore during theyear.
Guided by the well-crafted 5-year strategic plan christened as t20 hpcl iscontinuously enhancing its ability to navigate the future challenges by strengthening theexisting businesses of refining and marketing and incorporation of new business linesincluding petrochemicals & natural gas. The r&d capabilities of the corporationare continuously scaled up towards development of new technologies and products. Focus ison building a diversified and flexible business portfolio aligned with the needs ofchanging market coupled with expansion of business footprints in overseas geographies. Tokeep pace with the transition in the technology and customer preferences the company isfocussing on value creation by leveraging the emerging digital technologies fortransformation and enhancing it capabilities.
Your corporation continues to derive value from its collaborations joint ventures andsubsidiaries. During 2019-20 joint ventures and subsidiaries of your company haverecorded robust growth in their respective areas of business which helped hpcl to recorda strong consolidated performance. To enhance the overseas footprint hpcl has tied upwith state trade corporation of bhutan limited (stcbl) in 2019-20 for setting up retailoutlets and supply of motor fuels in bhutan. The first retail outlet in bhutan wascommissioned during march 2020.
The committed and competent human capital remains to be the backbone of your company.The corporation has about 10000 employees who run its countrywide operations. Armed witha number of millennials the corporation's workforce has strengths of both experience andyouthful energy. The corporation has a strong culture of learning and development whichis further enriched through initiatives such as e-learning partnerships with academialearning through virtual reality centre learning through hp academy rs etc. Focusis on nurturing the talent and capabilities of our people by creating a work environmentconducive to innovation and growth.
Your company has undertaken a number of large-scale projects across the hydrocarbonvalue chain to support future growth enhance efficiencies and improve competiveness.Visakh refinery modernisation project and mumbai refinery expansion project areprogressing well. The 9 mmtpa greenfield refinery cum petrochemical complex project ofhpcl rajasthan refinery limited (hrrl) is advancing well with construction in progress atsite. Marketing supply infrastructure is being augmented with pipeline network length ofover 1500 km and capacity addition of over 7 mmtpa. In addition a number of new poldepots/terminals lpg plants aviation service facilities cgd network are under differentstages of development along with upgradation of existing facilities at supply locations.
Global economic activity is likely to contract in 2020 followed by growth in 2021. Asregards indian economy it is expected that the combination of fiscal monetary andadministrative measures currently undertaken by government of india would createconditions for gradual revival in the economic activity. India is the third largestconsumer of oil in the world and about one third of the total primary energy demand is metby oil. India's fuel demand is on recovery path after the low witnessed in april 2020 aseconomic activity is gradually picking up on easing of lockdown restrictions. Withregulatory thrust on increasing penetration of low carbon energy domestic consumption ofnatural gas and other clean fuel is expected to increase. Your company remain focussed ondelivering consistent competitive profitable and responsible growth through sustainablebusiness models.
We are in a rapidly changing world where digital connectivity and abundance of data isreshaping value creation models across verticals. We continue to improve and evolveconsistently to meet the future demand by expansion of infrastructure portfolioexpansions expansion to overseas geographies improving operational efficiencies &competitiveness capability enhancements with effective and efficient usage of technology.
I am thankful to government of india ministry of petroleum & natural gas stategovernments various statutory and local authorities for their guidance and support in allour efforts. We look forward to their continued support in future as well.
I would like to thank the customers shareholders business associates employees andother stakeholders for their unflinching commitment and support. I would like to convey mysincere appreciation to the board of directors for their guidance and wise counsel.
I look forward to your continued support for our shared vision to create value for allour stakeholders and deliver happiness.
Mukesh kumar surana