HPCL’s profit jumps 79% to Rs 3,608 cr on refining, marketing margins

Hindustan Petroleum Corporation Ltd (HPCL) on Friday reported a 79 per cent jump in net profit for the March quarter on the back of a recovery in fuel marketing margins and an improvement in refining margins.

Consolidated net profit was Rs.3,608.32 crore in the January-March period compared to Rs.2,018.45 crore in the same period in the previous year, according to the company’s stock exchange filing.

However, the company posted a loss of Rs. 6,980.23 crore for the full financial year 2022-23 (April 2022 to March 2023) after incurring huge losses in the first half of holding petrol, diesel and LPG prices despite rising cost.

They continue to hold prices but the decline in global oil prices means they are making good profit margins now.

Petrol and diesel prices have been frozen since April 6 last year. The basket of crude oil that India imports was more than 100 USD per barrel in April last year and is now in the range of 75-76 USD.

Crude oil is processed at refineries such as those owned by HPCL in Mumbai and Vizag in Andhra Pradesh state into fuel.

While prices have fallen, the company, just like other state-owned companies – Indian Oil Corporation (IOC) and Bharat Petroleum Corporation Limited (BPCL) – continues to hold rates to offset losses incurred in the first half of the fiscal year.

Sales income increased by 9 per cent to Rs. 1.14 thousand crore in the January-March period.

For the full budget, income was Rs. 4.64k crores compared to Rs. 3.72k crores in 2021-22.

The company earned $12.09 converting each barrel of crude oil into fuel in 2022-23 compared to a gross refining margin of $7.19 per barrel.

Fuel sales increased slightly to 10.92 million tons in the January-March period from 10.26 in the previous year, while exports fell to 0.19 million tons, compared to 0.41 million tons in the January-March 2022 period.