HPCL Net Profit Plummets Amid Refinery Margin Cuts and Fuel Price Reductions

State-owned Hindustan Petroleum Corporation Ltd (HPCL) reported a drastic 90% drop in net profit for the June quarter. The significant decline was attributed to falling refinery margins and reduced fuel prices, which slashed marketing margins. HPCL's net profit stood at Rs 633.94 crore, down from Rs 6,765.50 crore a year earlier.

State-owned Hindustan Petroleum Corporation Ltd (HPCL) reported a dramatic 90% drop in net profit for the June quarter, primarily due to falling refinery margins and reduced fuel prices that slashed marketing margins.

HPCL reported a consolidated net profit of Rs 633.94 crore in the April-June period, compared to Rs 6,765.50 crore a year back, according to the company's stock exchange filing.

Sequentially, net profit also declined from Rs 2,709.31 crore in the January-March period. Pre-tax earnings from downstream fuel retailing businesses plummeted 90% to Rs 907.86 crore.

The company, along with other state-owned fuel retailers like Indian Oil Corporation (IOC) and Bharat Petroleum Corporation Ltd (BPCL), had last year maintained petrol and diesel prices despite a cost drop, leading to extraordinary gains. However, these gains were eroded with recent price reductions and stable crude oil prices, resulting in lower profits.

HPCL earned USD 5.03 per barrel of crude oil turned into fuel during the reviewed quarter, down from USD 7.44 per barrel in the same period last year.