The Hindu Business Line : HPCL betting on better gross refining margins to cut losses

The financial health of the oil marketing companies is now solely dependent on maximising the gross refining margin by way of using the right mix of cheaper crude.

Kolkata , Sept. 17

HINDUSTAN Petroleum Corporation Ltd (HPCL) is expecting an improvement in gross refining margin in the second quarter. The company had suffered from a relatively low gross refining margin compared to other oil marketing PSUs as it had to refine higher volumes of costlier low sulphur crude to meet the Euro-III and Euro-II auto fuel specifications in the first quarter.

At a time when oil marketing companies are losing heavily on retail sales of petroleum products, the refining margin has become the only means to reduce losses.

In other words, the financial health of the oil marketing companies is now solely dependent on maximising the gross refining margin by way of using the right mix of cheaper crude.

Sources in HPCL said that the company had to take a beating in the gross refining margin as the Mumbai refinery was shut down for maintenance in the first quarter and the Vizag refinery had to bear the entire burden of refining the cleaner fuel.

Though Vizag continued refining cleaner fuel for the first one-and-a-half months of the second quarter, till it went in for a maintenance shutdown, the company has been successful in improving the mix of cheaper high sulphur crude from 35 to 40 per cent in the second quarter. The change in crude mix has led to substantial savings for the refinery.

HPCL's gross refining margin received a further shot in the arm when Mumbai resumed operations in this quarter. The company has appointed a consultant to prepare an investment roadmap to gear its refining process to the use of cheaper crude.

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Oriental Insurance bags Paramount Airways deal

Mounting orders for compact spinning system — Suessen set to bring down machinery delivery time

Maruti to set up world-class driving schools in 15 cities

Peninsular Capital to foray into `margin funding'

Avon Organics converts warrants

Madhucon clears $80-m global offer

ITC e-Choupal wins Development Gateway Award

M&M puts in bid to buy Romanian co

NRI firm sets up roller flour mill near Coimbatore

Concor plans Rs 2,500-cr capex over five years

Avesthagen, Meditab set up biological manufacturing unit

Godrej appliances unit aims at Rs 750-cr turnover

French major Degremont eyes desalination projects in India

HPCL betting on better gross refining margins to cut losses

After 15 years of reforms, desi firms hold their own against MNCs

Cartoon