Rising crude oil prices and geopolitical tensions in West Asia are putting pressure on India’s oil marketing companies, particularly those supplying domestic LPG cylinders. Hindustan Petroleum Corporation Limited (HPCL) is currently facing a reported loss of ₹245 per LPG cylinder, which could increase to ₹327 in November, according to the company’s Managing Director, Vikas Kaushal.
The financial strain comes as international oil prices and transportation costs remain elevated. Oil marketing companies are continuing to sell domestic LPG cylinders at prices below market levels, adding to the pressure on their finances.
HPCL Reports ₹500 Crore Loss on LPG Sales
HPCL Managing Director Vikas Kaushal said the company incurred losses of around ₹500 crore from LPG cylinder sales between July and September.
Indian Oil Corporation, Bharat Petroleum Corporation Limited (BPCL) and HPCL are selling domestic LPG cylinders at rates below market value. This pricing situation is contributing to financial losses for the companies, particularly amid higher crude oil prices and ongoing geopolitical uncertainty.
Rising Shipping Costs Add to Financial Pressure
Higher transportation expenses are creating another challenge for oil marketing companies. HPCL reported that freight rates for Suezmax tankers had risen to $9 per barrel, compared with $4 per barrel in the first quarter.
With shipping costs increasing alongside crude oil prices, the company is also exploring urgent procurement options to address the current situation.
HPCL Posts Quarterly Net Profit of ₹3,625.22 Crore
HPCL reported a net profit of ₹3,625.22 crore for the second quarter, compared with a net loss of ₹12,264.67 crore in the first quarter.
Despite returning to profit on a quarter-on-quarter basis, the company’s profit declined by 6.1% compared with the corresponding period last year. HPCL had recorded a profit after tax of ₹3,859 crore in that quarter.
Revenue Rises 26.1% Year-on-Year
HPCL’s operational revenue increased by 26.1% year-on-year to ₹1,39,140 crore, equivalent to ₹1,391.4 billion, according to the figures provided in the report.
The company’s financial performance comes against a backdrop of rising crude oil and shipping costs, alongside continued pressure from domestic LPG pricing. These factors remain important considerations for oil marketing companies as they manage procurement and operating expenses.
Disclaimer: This article is intended for general informational purposes only. The financial figures and statements are based on the information provided and should be checked against official company disclosures for confirmation. This report does not constitute investment advice or a recommendation to buy or sell any financial product.