HPCL Q4 net skids 40% for holding fuel prices

New Delhi: Hindustan Petroleum Corporation Ltd (HPCL) on Thursday reported a 40 per cent drop in net profit in the quarter ended March 31 as higher refining margins were wiped away by losses on auto fuel sales.

Net profit of Rs1,795.26 crore in January-March compared with Rs3,017.96 crore a year back, the company said in a stock exchange filing. HPCL Chairman and Managing Director Pushp Kumar Joshi, at a media call, said the company earned $12.44 on turning every barrel of crude oil into fuel in the fourth quarter of fiscal 2021-22 as against a gross refining margin (GRM) of $8.11 per barrel in the same quarter a year back.

After removing inventory gains arising out of processing crude oil bought at lower rates, the core GRM came to $6.42 per barrel in Q4. But these gains were wiped away by losses on petrol, diesel and domestic LPG sales. HPCL and other public-sector oil companies held petrol and diesel prices for a record duration despite a surge in the cost of raw materials (crude oil) to a 14-year high.

They started raising prices only on March 22. Even after the Rs10 per litre increase in petrol and diesel prices between March 22 and April 6, they continue to make losses as international crude oil prices have stayed above $100 per barrel. Similar is the story with cooking gas LPG, where prices were hiked by Rs 50 per cylinder on March 22, but this was not enough to cover the gap between the cost of production and sale price.