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BPCL expects refinery throughput to get back to pre-pandemic levels by Q4 FY22: Director (Finance)

India’s second largest oil refiner Bharat Petroleum Corporation Ltd (BPCL) expects its refinery throughput to get back to pre-pandemic levels by Q4 FY22, said a top official
BPCL expects refinery throughput to get back to pre-pandemic levels by Q4 FY22: Director (Finance)
BPCL expects refinery throughput to get back to pre-pandemic levels by Q4 FY22: Director (Finance)
  • BPCL refineries processed 7.16 MMT of crude oil in the September quarter
  • Our intention is to continue our stake in IGL and Petronet LNG since these are our strategic investments, said BPCL’s Director (Finance) during an investors’ conference call

New Delhi: India’s second largest oil refiner Bharat Petroleum Corporation Ltd (BPCL) expects its refinery throughput to get back to pre-pandemic levels by Q4 FY22, said a top official of the disinvestment-bound PSU. During an investors’ conference call on Saturday, BPCL’s Director (Finance) VRK Gupta said, “If the demand keeps growing at the current level, we may reach the pre-pandemic level of throughput by Q4 of FY22.” BPCL refineries processed 7.16 MMT of crude oil in the September quarter. In percentage terms, the throughput was at 104 percent in Q2 of FY22, up from 82 percent in the corresponding quarter of the previous fiscal.

However, even though BPCL’s refinery throughput has improved year-on-year on the back of an increase in demand after the second wave of the COVID-19 pandemic, yet the figure of 7.16 MMT is way below the pre-pandemic levels of over 8 MMT. Gupta said that the oil marketing company (OMC) expects the throughput to be around 7.6 MMT in the December quarter of the current financial year.

BPCL working with govt to maintain stake in IGL, Petronet LNG

Responding to a question on whether BPCL would pare its stake in Indraprastha Gas Ltd (IGL) and Petronet LNG to shed its promoter status to obviate the need for the new owner to make open offers, the Director (Finance) said that no exemption has been granted by the Securities and Exchange Board of India (SEBI) to BPCL in this regard so far. “Our intention is to continue our stake in IGL and Petronet LNG since these are our strategic investments. So, we are still working with the government to ensure that our stake remains in place in these two companies,” said Gupta.

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According to SEBI regulations, the change in ownership structure of IGL and Petronet LNG after the strategic disinvestment of BPCL would trigger the takeover code and will require the new owner to launch an open offer for the purchase of additional 26 percent equity in the two entities. This is expected to add up another Rs 20,000 crore to the acquisition cost of BPCL. BPCL holds 12.5 percent stake in Petronet LNG and 22.5 percent in IGL.

‘Hopeful that BPCL disinvestment will be completed in FY22’

On being asked about the progress in BPCL’s disinvestment process, the Director (Finance) said, “We are hopeful that the process will be completed in FY22, as has been said by the government on numerous occasions. Beyond that, we cannot offer a comment because the process is being handled by DIPAM (Department of Investment and Public Asset Management). We have opened our data room and are responding to the requests made by bidders.”

BPCL’s work force will continue to remain lean: Director (Finance)

Commenting on a bulge witnessed in the cost of labour in Q2 (September quarter of the previous financial year, the Director (Finance) said that no such hike in employee cost is expected in the quarters to follow as BPCL’s work force has thinned down considerably after the implementation of the Voluntary Retirement Scheme (VRS). “If you compare Q2 FY22 with Q2 of FY21, definitely, last year, BPCL incurred exceptional expenditure on account of the VRS (Voluntary Retirement Scheme). After the implementation of the scheme, our manpower currently is very lean and we are expecting the numbers to remain like this in the subsequent quarters. And we don’t have any plans for new recruitments,” said Gupta.

Responding to a different question on BPCL’s receivables, Gupta said that the company only has Rs 120 crore outstanding, which is receivable from the Central government on account of the subsidy accrued on Liquefied Petroleum Gas (LPG). 

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