The Hindu Business Line : Chennai Petro net rises on higher refining margins

Chennai, May 15 Chennai Petroleum Corporation Ltd has reported a higher net profit, both for the last quarter of and full year 2007-08, thanks mainly to higher refining margins.

CPCL, a subsidiary of Indian Oil Corporation and a standalone refiner without its own marketing set up, sells its products to IOC at the same prices that IOC would pay an international seller. Hence, when international prices go up, CPCL gets better prices for its products though costs remain the same, resulting in better margins.

The company’s board has recommended a final dividend of Rs 12 a share, taking the total dividend for the year to Rs 15 a share, or 150 per cent.

Quality mark

The quantity of crude CPCL refined last year was slightly lower than in the previous year because the 1-million-tonne Cauvery Basin Refinery, which can process only certain types of crudes, did not get enough supplies of the raw material. As a result, the refinery could process only 4-lakh tonnes of crude.

But the (bigger) Manali refinery achieved record throughput of 9.8 tonnes, besting its previous record of 9.78 tonnes.

Addressing a press conference here on Thursday, CPCL’s Managing Director, Mr K.K. Archarya, said that the company was building secondary processing facilities — mainly a hydro diesel desulphurisation unit — at the Cauvery basin refinery. These would enable the refinery to process more varieties of crude and hence solve the problem of feedstock availability. The secondary processing facilities would not cost much, Mr Acharya said.

Alongside, CPCL has signed up with Gas Authority of India Ltd to supply 17,000 cubic metres of natural gas a day. In 2007-08, the Cauvery refinery produced 77.5 TMT of LPG, but with more natural gas from GAIL, the refinery would be able to produce 10 TMT more.

Mr Acharya said that in the current year, CPCL would spend Rs 800 crore on capital projects, against Rs 500 crore last year.