Hindustan Petroleum (HPCL) has posted a net loss of Rs 3364 crore for the July-Sept quarter as against a net profit of Rs 2,090 crore which it posted in the year-ago period. Net sales however grew 21% at Rs 37,030 crore for the quarter under review. Meanwhile, shares of the company were down 1.5% at Rs 328.55 at 12.07 hours on the Bombay Stock Exchange.
Analysts attribute these losses to the falling rupee against the dollar and mounting under-recoveries incurred due to sale of petroleum products below the cost of production.
Oil companies like HPCL import nearly 70% of the crude oil requirements. A rupee which currently stands at Rs 49 against a dollar, has weakened over 12% against the greenback quarter-on-quarter.
Being the largest purchasers of dollars in the domestic currency market, oil companies like Bharat Petroleum (BPCL), Hindustan Petroleum (HPCL) and Indian Oil Corporation have collectively lost around Rs 2,000 crore in September alone due to rupee constantly depreciating against the dollar—as oil remains the biggest import item in India.
These companies import around 50,000 barrels of crude each day. Now with the rupee weakening over 12% Q-o-Q, oil companies had to pay Rs 4108 crore each day toward oil purchase instead of Rs 3,438 crore which they paid in the April-June quarter of the current financial year.
Simultaneously, HPCL is losing Rs 7.06 per litre on diesel, Rs 25.90 per litre on kerosene sold through the public distribution system (PDS) and Rs 270.50 per 14.2-kg LPG cylinder supplied to domestic households for cooking purposes.
"The oil marketing companies are currently incurring a daily under-recovery (revenue loss) of about Rs 272 crore on sales of diesel, PDS kerosene and domestic LPG," a recent statement issued by the petroleum ministry said.
Source: www.moneycontrol.com
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