State-owned Hindustan Petroleum Corporation (HPCL) reported a net profit of Rs 2,354.6 crore on a standalone basis for the three months ended December, recording a 215% rise from the same period a year ago. The company attributed the rise in profit to effective refinery scheduling and inventory management, “duly supported by favorable crude price movements leading to inventory gains and rupee strengthening”.
While revenue grew 4.4% year-on-year (y-o-y) in Q3FY21 to Rs 78,277.5 crore, expenses — comprising mostly of crude oil purchase — increased moderately by 1.7% to Rs 75,119.6 crore.
The company’s gross refining margins, including inventory gains, inched up to $1.87 per barrel in the quarter from $1.79/barrel in Q3FY20. During the quarter, domestic sales of HPCL’s petroleum products increased 2.7% annually to 10 million tonnes, as petrol sales increased by 6.4%, diesel by 1.2 % and LPG sales grew by 5.9%.
Under the ongoing buyback programme, HPCL has bought back 4.1 crore shares for Rs 885.42 crore. The oil refining and marketing company had announced the buyback of 10 crore equity shares — representing 6.56% equity stake — at Rs 250 per share in November, 2020.
Indicating that the recent surge in global crude rates ($58.8/barrel on Thursday from $55/barrel on January 29) may further increase auto fuel prices in near term in the absence of government tax cuts, HPCL chairman Mukesh Kumar Surana said, “on the mid/long term basis, we anticipate crude price to hover between $50-60 per barrel, and retail rates factor in such range of crude prices”.
Surana also said that refineries will be interested in testing the suitability of the Basra medium grade of crude oil which was recently launched by Iraq. When asked about the possibility of the new US government lifting sanctions from Iran, the chairman said, “but for the sanctions, we will be happy to take that crude to process in our refineries”, noting that “in the past we had received favourable conditions, payment terms, freight concessions for Iran crude, which made it preferential”.