New Delhi: Hindustan Petroleum Corporation Limited (HPCL) on Wednesday reported swinging back to profit in the June quarter as the freeze on petrol and diesel prices revised helped the marketing margin turn positive.
Net profit of Rs 6,203.90 crore in April-June (the first quarter of current fiscal 2023-24) compared with Rs 10,196.94 crore of loss in the same period a year back, according to a company's stock exchange filing.
The profit was over 92 percent higher than Rs 3,222.62 crore net profit in the preceding quarter.
Last year, HPCL and other government-owned fuel retailers -- Indian Oil Corporation (IOC) and Bharat Petroleum Corporation Ltd (BPCL) -- froze retail petrol and diesel prices to cushion domestic consumers from rising international oil rates.
That freeze led to the three retailers suffering heavy losses in not just the April-June 2022 period but also in the subsequent quarter.
Margins on petrol and diesel turned positive following softening of international oil prices in the June quarter, but rates were not revised, and the companies recouped losses they incurred last year.
IOC, last month, reported a net profit of Rs 13,750.44 crore and BPCL booked Rs 10,644 crore earnings in the June quarter.
The fall in oil prices meant that revenue from operations for HPCL fell 2 percent to Rs 1.18 lakh crore.
The company earned $ 7.44 on turning every barrel of crude oil into fuel during the quarter ended June 30 against a gross refining margin (GRM) of $ 16.69 per barrel in the same period last year, the filing said.
HPCL said fuel sales rose to 11.43 million tonnes in the first quarter from 10.45 million tonnes a year back. Its refineries processed 5.4 million tonnes of crude oil, up from 4.81 million tonnes in April-June 2022.
IOC, BPCL and HPCL temporarily abandoned the daily price revision last year and have not revised petrol and diesel prices in line with the cost. And the losses they incurred when the oil prices were higher than the retail selling prices are recouped with rates dropped.
The three firms have been making positive margins on petrol since the fourth quarter of the 2022 calendar year but diesel, which accounts for the bulk of the fuel sales, had been in the red.
But in May, margins on diesel turned positive with a small 50 paise a litre profit.
International oil prices had spiked to USD 139 per barrel in March 2022 in the aftermath of the Russia-Ukraine war. They cooled to around USD 75 per barrel during May-June.
At peak, oil firms lost Rs 17.4 per litre on petrol and Rs 27.7 a litre on diesel. In the October-December quarter, oil firms earned Rs 10 a litre margin on petrol but lost Rs 6.5 per litre on diesel. In the following quarter, the margins on petrol moderated to Rs 6.8 a litre while diesel earned Rs 0.5 per litre.
Oil prices have firmed up since last month. The basket of crude oil that India buys has averaged USD 80.37 per barrel in July and USD 85.71 in August.