State-owned Hindustan Petroleum Corporation Ltd reported a consolidated net profit of Rs 5,826.96 crore in the quarter ended September, against a loss of Rs 2,475.69 crore in the same quarter last financial year. Improved marketing margins on the back of discounted Russian Urals and inventory gains even as the oil marketing companies (OMCs) kept the prices of auto fuels unchanged helped the company recover losses incurred when rates were high last year.
However, net profit was down by 13.8% from Rs 6,765.50 crore in the previous quarter as crude oil prices edged higher towards the end of the quarter reaching to their highest levels of $97 a barrel in September.
The company’s revenue from operations fell to Rs 1,02,288.61 crore in Q2FY24 from Rs 1,13,856.29 crore in Q2FY23. On a quarterly basis too, the revenue fell by 14% from Rs 1,18,769.10 crore.
Average Gross Refining Margin (GRM) for the period April to September was $10.49 per barrel as against $12.62 per barrel during the corresponding previous period, the company said in an exchange filing.
“This is before factoring-in the impact of Special Additional Excise Duty and Road & Infrastructure Cess levied, effective July 1, 2022, on export of select petroleum products,” the company said.
HPCL’s total income too fell by 10% to Rs 1,03,010.71 crore from Rs 1,14,497.65 crore in September last year.
The operating margin of the company declined to 6.80% in September from 6.96% in the same period the previous quarter.
The company’s product sales reported an increase of almost 2% to 10.08 million tonne (MMT) in Q2FY24 from 9.87 MMT in Q2FY23. However, sales declined by 12% from the previous quarter. The refineries’ throughput also declined by 5.5% to 6.13 MMT from the last quarter.
Last year, state-owned fuel retailers, IOCL, Bharat Petroleum Corporation Ltd, and Hindustan Petroleum Corporation Ltd kept prices of petrol and diesel unchanged despite a rise in global oil prices following Russia’s invasion of Ukraine.
Although crude prices have remained range bound during the first half of the current financial year, analysts believe a further spike is possible if the war between Israel and Palestine is spread over the Middle East, a region accounting for almost a third of the total oil production.
According to analysts at S&P Global, Indian refiners might go back to importing Venezuelan crude as the discount offered by Russia poses uncertainty.
Crude oil imports from Venezuela to India can have a sobering effect in the market, oil minister Hardeep Singh Puri had earlier said amidst a rising concern of dwindling Russian discounts on oil and talks of India reconsidering Venezuela as a key importer.
India’s share of Russian crude oil decreased in October from the peak of approximately 2 million barrels per day witnessed earlier this year as the discounts offered by the latter narrowed.
“If the refining economics would favor Venezuelan crude in the future, Indian refiners may need to displace crude from their existing sources, which might include Middle Eastern, Latin American and US crudes,” S&P Global had said in its report.
India’s crude oil imports from Russia fell to 1.57 million barrels a day in October from 1.78 million bpd in September, as per data from Kpler. Imports from Saudi Arabia, however, jumped almost 65% on month to 7,96,659 bpd. Of India’s overall imports of 4.50 million bpd in October, Russian crude accounted for nearly 35% of total imports followed by Iraq with 21% share and Saudi Arabia at 18%.