HPCL Reports Sharp 90% Decline in Q1 Profits Amid Fuel Price Cuts

State-owned Hindustan Petroleum Corporation Ltd (HPCL) has reported a 90% drop in net profit for the June quarter, with refinery and marketing margins taking a significant hit. The net profit declined to Rs 633.94 crore from Rs 6,765.50 crore the previous year. Fuel price reductions and stable crude oil prices contributed to the profit fall.

State-owned Hindustan Petroleum Corporation Ltd (HPCL) on Monday reported a massive 90 per cent drop in net profit for the June quarter due to falling refinery margins and a fuel price reduction that slashed marketing margins.

HPCL revealed a consolidated net profit of Rs 633.94 crore in April-June, the first quarter of the current 2024-25 fiscal year. This is a stark contrast to the Rs 6,765.50 crore profit recorded a year earlier, according to a stock exchange filing.

Sequentially, net profit also dwindled from Rs 2,709.31 crore in the January-March quarter. Pre-tax earnings from downstream fuel retailing businesses fell by 90 per cent to Rs 907.86 crore.

The previous year, HPCL and other state-owned fuel retailers gained significantly by holding petrol and diesel prices despite a drop in costs to recover previous losses. However, recent petrol and diesel price cuts of Rs 2 per litre, and a decrease in product cracks on stable crude oil prices, have eroded these gains, hitting net profit hard.

Gross refining margin (GRM) also decreased, with HPCL earning USD 5.03 per barrel of crude oil turned into fuel, compared to USD 7.44 per barrel a year earlier, due to lower international product cracks.

Despite planned refinery shutdowns, HPCL increased crude oil processing by 6.7 per cent to 5.67 million tonnes this quarter. The company also recorded its highest-ever quarterly sales volume of 12.63 million tonnes, including exports, a 6.6 per cent growth over the previous year.

Notably, the company achieved a market share gain of 0.25 per cent among PSU oil marketing companies. Motor fuels sales grew 2.7 per cent to 8.02 million tonnes, while LPG sales volume increased by 8.7 per cent to 2.07 million tonnes during the quarter. The aviation business saw a robust 31.3 per cent growth, with a sales volume of 261,000 tonnes.

(With inputs from agencies.)