How has the recent fuel price hike helped you in your liquidity position?
Our per-day under-recovery is now brought down to Rs 120 crore per day. As of now, our borrowings are at Rs 18,500 crore. We plan to hold our borrowings at this level for the next month-and-a-half. HPCL's borrowings go up due to crude purchase. We are holding Rs 5,000 crore worth of bonds and these will be able to take care of our crude purchase. Till July-end, we are not anticipating any serious increase in our total borrowings. We are hoping that the government will give us Q4 bonds by July that can last some more time. We still have large under-recoveries projected. The crude price has shot up. From an average of $79 in 2007-08, the Indian crude basket is today at $131. As a result, we have an under-recovery projected at Rs 43,000 crore for the current year.
The RBI has decided to enhance the overall ceiling on open market operations to Rs 1,500 crore on any single day. How far will that help you?
The borrowings were expected to be much higher had the RBI not decided to enhance the overall ceiling on open market operations to Rs 1,500 crore on any single day. Our long-term loan is just Rs 2,800 crore and our long-term debt-equity ratio is around 0.24. But there is high short-term borrowing, that went from Rs 16,000 crore from March 2008 to Rs 18,500 crore currently. Higher interest rate is also an issue.
So what plans do you have to keep your under-recoveries low?
HPCL is in the refining and marketing (R&M) sector. We have to deal with the problem of under-recovery and liquidity. We have refineries with a total crude refining capacity of 17 million tonnes. Whereas, our domestic marketing is around 22.5 million tonnes. So, there is a gap of five million tonnes. This extra five million tonnes is creating issues for us as far under-recoveries are concerned. We are thus looking at increasing our refining capacity so that it's at par with our marketing capacity. Our 9-mmtpa (million metric tonne per annum) refinery at Bhatinda will help us meet this need. This will reduce our import dependence and help us be at par on the marketing and refining front.
What plans do you have on the Exploration and Production (E&P) front?
We have set aside around Rs 2,000 crore over a period of five years for E&P. We have been participating in the New Exploration Licensing Policy (NELP) rounds for the same and are also looking at the petrochemicals sector aggressively.
