Hindustan Petroleum Corporation (HPCL) has reported a whooping profit of ₹ 3,018 crores in inventory gains and an increase in refining margins. This company runs exclusive refineries in Vishakhapatnam and Mumbai. It also had a net profit of ₹ 27 crores from January to March 2020.
In this regard, the chairman of HPCL, named M.K. Surana, stated that the increased profit resulted from robust operational performance, improvement in refinery margins with the authenticated assistance of inventory gains and exchange rate variations. It has managed to earn $8.11 by transforming every barrel of crude oil into fuel.
Mr. Surana further said that inventory gains are recorded when raw materials like crude oil prices increase when a company changes its oil into fuel. On the other hand, losses are incurred when such a thing happens in a reverse manner. The company recorded an inventory gain of ₹ 4,608 crores in the fourth session of 2020-2021.
HPCL raised his net profit in Q4 Results
This was quite different from the inventory losses incurred of ₹ 4,113 by the company in the same session of the previous year. Besides this, the company reserved ₹ 141 crore in foreign exchange gains within the session between January-March 2020-21 compared to a loss of ₹ 975 crores last year.
The chairman stated that “outburst of a pandemic led to noteworthy demand reduction in the first part of the year. A smarter regaining charted this in the latter part of the year, directing a collective demand withering for the petroleum products to 9 percent in 2020-21 over the former year”.
Also, the essential crude sourcing plans, improving daily crude run rate, resourceful logistics management, and amending product findings from other sources supported HPCL towards achieving more than 100 percent capacity employment in refineries. HPCL incurred the profit despite the reduction in crude oil demands.