The decrease in profit was due to a sharp decline in crude prices in the month of May and June, 2019, leading to inventory losses both, at the refinery and in marketing, and also lower average cracks for all products except for LPG and fuel oil. The company had an inventory loss of Rs 535 crore during the quarter under review, as compared to an inventory gain of Rs 2,332 crore during the same period last year.
During Q1FY20, HPCL achieved a domestic sales volume of 9.82 million tonnes with a growth of 1.7 per cent. The sales of motor spirit (petrol) increased by 8.4 per cent, high speed diesel by 1.7 per cent, value added lubes by 11 per cent and bitumen by 13 per cent as compared to the Q1FY19.
The refineries at Mumbai and Visakhapatnam processed 3.92 Million Metric Tonnes (MMT) of crude in the Q1FY20, as against 4.52 MMT during the Q1FY19. Lower throughput at refineries was mainly due to planned shutdowns. The company said that after adjusting for inventory gains/losses in both quarters, the core GRM during current was $ 3.30 a barrel as compared to $ 3.27 a barrel during the corresponding period of the previous year.
During the quarter, total borrowings of HPCL fell to Rs. 20,427 crore as against Rs. 27,240 crore during the same quarter of the previous year. In Q1FY20, a total of 31 new retail outlets were commissioned taking the total retail outlet network to 15,471 as of June 2019. HPCL has signed an agreement with the State Trade Corporation of Bhutan Limited (STCBL) for supply of fuel in Bhutan and also for providing expertise in the design, construction, commissioning and operation of retail outlets.