New Delhi: Hindustan Petroleum Corp (HPCL) on Tuesday reported an 86 percent drop in second-quarter profit after it received lower fuel subsidy and refining margins dropped.
Net profit fell to Rs 318.92 crore in July-September from Rs 2,372.09 crore a year earlier, HPCL Director (Finance) K V Rao told reporters here.
State-owned HPCL lost Rs 8,234 crore on selling diesel, domestic cooking gas (LPG) and kerosene at rates set by the government in Q2. To make up part of the shortfall, upstream oil firms such as ONGC chipped in Rs 3,909 crore and the government gave a cash subsidy of Rs 4,127 crore.
"After accounting for upstream share and government compensation, we had a net under-recovery (revenue loss) of Rs 198 crore," he said.
Profit in the year-earlier quarter was high because the government paid fuel subsidy for two quarters (Q1 and Q2 of FY13) in that period.
The company earned USD 3.81 on turning every barrel of crude oil into fuel in Q2 in the current financial year as opposed to a gross refining margin of USD 4.3 in the same period last year, he said.
Rao said the company suffered a forex loss of Rs 153 crore after volatility in the rupee-dollar exchange rate.
HPCL and other state-owned fuel retailers Indian Oil Corp (IOC) and Bharat Petroleum Corp (BPCL) sell diesel, LPG and kerosene below the cost of production to help curb inflation.
They depend on cash compensation from the government and discounts on crude oil from Oil and Natural Gas Corp (ONGC) and Oil India Ltd (OIL) to bridge the gap between cost and the sale price.
Turnover rose 8 percent to Rs 54,453.74 crore in Q2 from Rs 50,227.71 crore in the corresponding period last year.
"Domestic sales of petroleum products increased to 6.94 million tonnes, registering a growth of 3.7 percent over the same period of the previous year, as against the industry average growth of 0.4 percent," Rao said.
Petrol sales increased 7.2 percent, while diesel sales were up 4.4 percent over the second quarter of the previous year - the highest growth rates among PSU fuel retailers.
HPCL's refineries at Mumbai and Visakhapatnam processed 3.89 million tonnes of crude during July-September as against 3.65 million tonnes in Q2 last year.
HPCL said the net loss for April-September narrowed to Rs 1,141.56 crore from Rs 6,921.71 crore in H1 last fiscal. Turnover in this six-month period increased to Rs 107,696.29 crore from Rs 96,633.45 crore.
First Published: Tuesday, November 12, 2013, 15:38