State-run refiner Hindustan Petroleum Corp (HPCL) on Friday reported a 56 per cent drop in its net profit for the first quarter of the current fiscal caused by inventory losses and consequent lower refining margins.
HPCL had a net profit of Rs 924.75 crore for the first quarter of the current fiscal, as compared to the Rs 2,098 crore net profit earned during the corresponding quarter of the last financial year.
Inventory loss, which occurs when crude oil prices fall after procurement and before marketing, during the quarter in consideration came in at Rs 1,595 crore.
"During the first quarter of the financial year 2017-2018, there was an inventory loss of Rs 960 crore in marketing and Rs 635 crore in crude oil oil inventory. Comparably, there was an inventory gain of Rs 1,935 crore in the corresponding quarter of the last financial year, " HPCL Chairman M.K. Surana said.
Gross refinery margin (GRM), denoting earnings on refining a barrel of crude, for the first quarter stood at $5.86 per barrel, as compared to the GRM of $6.83 during the corresponding period of the last financial year.
Indian Oil Corp on Thursday posted a 45 per cent fall in its net profit for the first quarter due to inventory loss and sharp fall in GRM.
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The Indian basket of crude oils closed trade on Thursday at $ 51.48 a barrel.
Last month, the union cabinet approved the sale of over 51 per cent government stake in HPCL to state-run explorer ONGC in a move that would make the refiner a subsidiary of the oil producing giant.
HPCL stock closed trade on Friday at Rs 431.65 a share, up Rs 34.35, or 8.65 per cent, over its previous close on the BSE.
--IANS
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