New Delhi: State-owned Hindustan Petroleum Corp Ltd (HPCL) on Tuesday reported a steep drop in net profit for the quarter ended December 31, as refining margins shrunk and government did not compensate it fully for fuel losses.
The company posted net profit of Rs 147.11 crore for October-December, compared to net profit of Rs 2,725.18 crore in the year-ago period, HPCL Executive Director (Finance) K V Rao told reporters here.
"The profit for the quarter ended December 31, 2011 was higher as approval for compensation for under-recoveries (revenue losses) on sale of sensitive petroleum products of earlier quarters was accounted for during October-December 2011," he said.
During the first nine months of the 2012-13 fiscal, the company lost Rs 27,706 crore on sale of diesel, domestic LPG and kerosene at government-controlled rates. Of this, Rs 10,041 crore was made good by upstream firms like ONGC, and another Rs 12,205 crore came as cash subsidy from the government.
"There is Rs 5,460 crore unmet under-recoveries," he said adding that the company had debts close to Rs 36,000 crore.
Fuel retailers are currently losing Rs 9.22 per litre on diesel, Rs 31.60 a litre on kerosene and Rs 481.03 per 14.2-kg domestic LPG cylinder.
HPCL, which has been borrowing USD 400-500 million every year in overseas loans, is looking at raising an equivalent amount in external commercial borrowings (ECBs) before March end.
"We have approval from the RBI to raise USD 750 million in foreign debt. The remaining (after raising USD 400-500 million of ECB) will be raised through bonds this fiscal or the next," Rao said, adding that the company is in the process of appointing agency to do credit evaluation of the firm.
The company earned USD 1.92 on turning every barrel of crude oil into petroleum products during the quarter as compared to a gross refining margin of USD 4.09 per barrel in a year ago period, he said.
Crude throughput increased to 4.22 million tons from 4.08 million tons in Q3 last fiscal while sales was up over 2 percent to 7.31 million tons.
Due to government's failure to compensate it fully for the fuel losses, HPCL had accumulated loss of Rs 6,774.60 crore in the April-December period.