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New Delhi: Hindustan Petroleum Corp’s (HPCL) fourth-quarter profit fell 40% year-on-year to Rs 1,795 crore on weaker marketing margins.

The sales revenue jumped 24% from a year earlier to Rs 104,942 crore in the Jan-March period on higher prices. The gross refinery margin (GRM) was $12.44 per barrel for the quarter compared to $8.11 for the same period in the previous year. The core GRM, after removing inventory gains, was $6.42 per barrel against $3.5 in the year-ago period.

Oil marketing companies haven’t been able to raise domestic fuel prices in line with the increase in the international markets, resulting in pressure on their marketing margins.

HPCL has been sourcing Russian crude and plans to use more depending on its economics, chairman Pushp Kumar Joshi said. “We have been utilizing this opportunity. And, obviously when it makes economic sense, then only we buy that. Also, it should fit into our refinery configuration,” he said.

India is also seeking a term deal with Russia for crude purchases, Joshi said. “There are discussions at G2G (government-to-government) level. As I said, we are open to any kind of opportunity and if something is done at G2G level, we would obviously be part of that,” he said, referring to the term deal talks.

HPCL expects crude prices to remain elevated through the year, hovering above $100 per barrel in 2022.

The company hasn’t faced any shortage of refined products and is able to meet requirements at its retail outlets using the refineries it solely operates or jointly owns.

HPCL didn’t have any major upstream plans and was planning to rope in parent

to help manage its small upstream business. A synergy committee will explore how the competence of ONGC, India’s largest explorer, can be used for HPCL’s exploration and production business, Joshi said. And then the board of the two companies will take a call on how to take things forward, he added.

Ahead of the earnings on Thursday, HPCL shares, valued at Rs 33,860 crore, closed 2% lower at Rs 238.70 apiece. The benchmark Sensex ended the day 2.6% lower.


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