New Delhi: State-run Hindustan Petroleum Corp Ltd (HPCL) is considering a further increase in petrol prices as it struggles to cut down on retailing losses, its finance director said on Tuesday.
The oil refining and marketing firm, which posted a quarterly loss of Rs 33.6 billion ($548.4 million) on Tuesday, is in talks with other retailers on the issue and a price increase could come as soon as within the next two weeks, B. Mukherjee told reporters.
The company also said it is looking to buy overseas oil and gas assets in Australia and Africa, and may partner with other firms in that effort, he said, without giving more detail. HPCL owns stakes in three exploration blocks in Australia and Egypt.
“We are losing about Rs 1.5 per liter and to cover it up, the price hike should be of the order of Rs 1.82 per liter. That is the position of OMCs (oil marketing companies),” he said.
Raising the petrol price by Rs 1.82 per litre would be an increase of 2.7% from the current Delhi price.
“It may happen. We will see,” he replied, when asked if the increase was likely within the next two weeks.
HPCL and its fellow state oil product sellers Bharat Petroleum Corp Ltd (BPCL) and Indian Oil Corp last raised petrol prices by nearly 5% in September to ease their subsidy burdens, but added to stubbornly high inflation in Asia’s third-largest economy. The three state giants tend to move their prices in tandem.
India’s headline inflation in September stood at 9.72% and has topped 9% for nearly a year, prompting the central bank to lift its policy lending rate last month for the 13th time since March 2010.
India granted autonomy to state-run firms last year to fix retail prices for petrol, but the government continues to control prices of diesel, cooking gas and kerosene. The government last allowed a diesel price increase in June.
Last week, BPCL posted a loss of Rs 32.3 billion and said results had been adversely affected by high crude oil and product prices that did not fully pass that cost on to consumers.
Meanwhile, a falling rupee - the Indian currency is down 11% against the dollar since a late July peak - adds to the imported oil bill for India’s three big state oil marketers.
HPCL’s net loss for the July-September quarter compared with net profit of 20.9 billion a year earlier. Net sales rose to Rs 370.3 billion, from 307.1 billion in the year-earlier quarter.
Gross under-recoveries for the quarter nearly doubled to Rs 46.86 billion, from Rs 24.24 billion a year ago, Mukherjee said.
Gross refining margins, a key measure of profitability, fell to $1.92 per barrel for the quarter, from $2.66 a barrel in the same quarter last year.
Shares in HPCL, valued by the market at $2.3 billion, ended 0.4% higher, outperforming a broader market that ended 1.3% lower. The stock has dropped 14.6% in the year to date, in line with the main stock index.