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New Delhi, July 29 Soaring crude and petroleum product prices have taken their toll on the financial performance of public sector refining-cum-retailing company Hindustan Petroleum Corporation Ltd (HPCL).

The company’s net loss for the first quarter of the current financial year (FY 09) stood at Rs 888.12 crore as against a loss of Rs 86.93 crore in Q1 of FY 08.

The loss is despite good refining margins which the company made during the quarter. Refining margins are the difference in value between the products produced by a refinery and the value of the crude oil used to produce them. The gross refining margins for the quarter were $15.23 a barrel ($9.04) for the Mumbai refinery and $17.05 a barrel ($7.80) for Visakhapatnam refinery.

However, the company’s net sales increased to Rs 34,749.32 crore for the quarter (Rs 21,881.70 crore).

“Financial results for the quarter have been adversely affected due to high crude and product prices, which could not be passed on to the consumers. This led to the company absorbing under recoveries to the tune of Rs 2,757 crore during the first quarter of the current fiscal,” Mr B. Mukherjee, Director (Finance), HPCL, said. The gross under recovery for the quarter on the four petroleum products – petrol, diesel, kerosene and cooking gas – was Rs 10,229 crore for HPCL, he said.

The under recovery on petrol, diesel, kerosene sold under public distribution system, and cooking gas for the quarter was partially compensated by way of discounts from upstream oil companies like ONGC and GAIL for crude oil, LPG, and kerosene purchased from them amounting to Rs 2,357.38 crore (Rs 900.94 crore in Q1 FY 08). Shares of HPCL closed at Rs 218.10, down 5.26 per cent on the BSE.

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