NEW DELHI: State-run oil marketing major Hindustan Petroleum Corporation Ltd (HPCL), a subsidiary of ONGC Ltd, has seen net profits fall slightly during the quarter ended September 30 primarily due to a sharp reduction in its gross refining margins during the period.
The company, which posted a net profit of Rs 1,091.98 crore during the same period of the previous financial year, saw the number fall 3.6 per cent to Rs 1,052.31 crore this year. The same period saw the company record a near halving of its refining margins, one of the prime indicators of profitability for a refiner, with Gross Refining Margins (GRM) falling from $4.81 a barrel a year ago to just $2.83 a barrel during the second quarter of the current financial year. The quarter also saw the company record a foreign exchange (forex) loss of Rs 122 crore compared to Rs 887 crore during the same quarter of the previous year.
peaking on the company’s performance, chairman and managing director M K Surana said, “Despite a volatile market, operationally we had a stable performance... adjusting the inventory gain, we had more or less the same GRM during the quarter under review”.
The CMD of the company also said that its refineries are being upgraded to produce transportation fuels meeting the soon-to-be rolled out BS VI specifications and that the company will soon be ready to roll out BS VI fuel on pan India basis as per the scheduled date.
HPCL has already rolled out BS VI fuel in the National Capital Region (NCR), four districts of Rajasthan, eight in Uttar Pradesh and seven in Haryana.
Warning against quick fix
Garg warned against “quick fixes”. “When growth slows down, there is a widespread concern and angst aimed mostly at the government with the expectation that it would bail out the economy from the situation…This leads the government to look for quick fixes for ‘jump starting’ growth. These quick fixes, more often than not, do not work,” he said. The government has slashed corporate taxes, launched loan melas and announced sector wise packages to help industry revive.