HPCL Q1 Result: Hindustan Petroleum Corporation Ltd (HPCL) on Saturday reported the highest quarterly net loss of Rs 10,196.94 crore in the June quarter, as revision in petrol and diesel prices wiped out record refining margins.
According to the company’s filings with the stock exchanges, a standalone net loss during April-June stood at Rs 10,196.94 crore as compared to a net profit of Rs 1,795 crore in the same period a year ago.
During the quarter, HPCL and other state-owned fuel retailers Indian Oil Corporation (IOC) and Bharat Petroleum Corporation Limited (BPCL) did not revise the prices of petrol and diesel in line with the rising prices to help the government control runaway inflation. be able to help.
Crude oil imports into India averaged $109 a barrel, but the retail pump rates ranged from $85-86 a barrel.
IOC also posted a net loss of Rs 1,992.53 crore in the June quarter due to the freeze.
The loss for IOC, which is almost twice the size of HPCL, was small as it had huge oil refining and petrochemical businesses to offset some of the losses on fuel marketing. HPCL on the other hand sells more fuel than it produces. To meet about one-fourth of the market it controls, it has to buy petrol, diesel and LPG from refineries, which will sell the fuel at market prices, not subsidized rates.
HPCL’s revenue from the sale of products rose to Rs 1.21 lakh crore in the first quarter of the current fiscal, starting from Rs 77,308 on April 1.
53 crore a year ago. This is mostly due to high oil prices internationally. This is the biggest quarterly loss till date for HPCL.
These losses negated record refining margins. HPCL earned USD 16.69 on each barrel of crude oil converted into fuel at the refinery gate in April-June 2021 as against the Gross Refining Margin (GRM) of $3.31 per barrel.
“During the current quarter, profitability has been adversely impacted due to decline in marketing margins on motor fuels and LPG,” the firm said in its accounts note.
HPCL also suffered a foreign exchange loss of Rs 945.40 crore on account of exchange rate fluctuations.
While the government has said that oil companies are free to revise retail prices, the three state-owned firms have not clarified the reasons for freezing rates.
Usually, oil companies calculate refinery gate price based on import parity rates. But if the marketing division sells it at prices below the import parity, the loss is recorded.
HPCL reported a pre-tax loss of Rs 13,496.66 crore on sale of petroleum products in April-June as against Rs 2,381.53 crore in the year-ago period.
Its profit before tax stood at Rs 2,261.67 crore in the preceding (January-March 2022) quarter.
The loss was 8.45 million tonnes a year ago, despite fuel sales rising to 1.45 million tonnes in the June quarter. Its refineries converted 4.81 million tonnes of crude oil into fuel, almost double from 2.51 million tonnes in April-June 2021.
State fuel retailers must align rates with an international cost every day. But they have stable prices from time to time before important elections.
IOC, BPCL and HPCL stopped revising rates ahead of assembly elections in states like Uttar Pradesh. That 137-day freeze ended in late March and prices were hiked by Rs 10 a liter before another round of freezes was implemented in early April.
International oil prices have risen to several-year highs due to supply concerns following Russia’s invasion of Ukraine.
The government in May cut excise duty on petrol and diesel, which were passed on to consumers instead of being used, to offset mounting losses on the two fuel sales.
The current moratorium on petrol and diesel prices is now 122 days long, excluding the cut due to cut in excise duty.
Last month, ICICI Securities said in a report that IOC, BPCL and HPCL sold petrol and diesel at a loss of Rs 12-14 per litre, completely impacting the strong refining performance during the quarter.
Later, HPCL said in a statement, “Extraordinarily high input cost and decline in margins on motor fuels and LPG have impacted profitability, resulting in net loss.” It said the Mumbai refinery has stabilized at an expanded capacity of 9.5 million tonnes per annum and it operates at 102 per cent of the enhanced capacity during April-June 2022.
During April-June 2022, HPCL invested Rs 2,809 crore for upgradation of refinery/marketing infrastructure including equity investment in its joint ventures and subsidiaries.
The expansion of Vizag refinery from 8.3 million tonnes to 1.5 million tonnes is an advanced stage of completion, it said.
HPCL installed CNG refueling facilities at 52 petrol pumps during the first quarter, taking the total number of retail outlets with CNG facilities to 1,139. Electric Vehicle (EV) charging facilities were installed at 34 petrol pumps to take the retail outlets with EV charging facility to 1,045.