The Hindu Business Line : BPCL hopeful of rise in gross refining margins

BHARAT Petroleum Corporation Ltd (BPCL) expects a substantial rise in its gross refining margins in the second half of this fiscal. The company has just completed the expansion and techno-economic upgradation programme of its refinery at Mumbai to refine higher percentage of high sulphur cheaper crude.

BPCL sources said that the Rs 2,100-crore, three-million-tonne capacity programme had been successfully completed except for a Rs 370-crore component of adding lubrication base oil facility. The latter is due to be completed by the end of this year. The base oil facility was earlier conceived to be a part of the proposed Bina refinery but later shifted to Mumbai.

The company expects a rise in heavy crude component from 40-50 per cent on an enhanced capacity of 12 million tonnes during the second half of 2005-06.

The gross refining margins will receive a further boost once the company expands its pipeline for carrying petro-products up to Delhi by the end of 2006 or early 2007. Currently, BPCL has petroleum product pipeline from Mahul to Mangalia Terminal near Indore from where the refined products are sent to the North Indian market by road.

Since North Indian market offers an additional revenue of Rs 1,200 to 1,400 per tonne compared to the western region, the margins are expected to shoot up once the company commissions the pipeline to deliver the product directly to Delhi.

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