Refinery stocks in losses
HPCL as well as BPCL are currently among the top five losers on the BSE; BPCL went down almost 5% to hit an intraday low at Rs.320.30 while HPCL went down 6.5% to Rs.235.10.
Both the oil PSUs announced their earnings for Q1Fy23 and needless to say, both were disappointing.
HPCL, on a 15% (YoY) rise in revenue at Rs.1,21,496 crore, posted a net loss at Rs.8557 crore v/s profit of Rs.2018 crore. This is the biggest quarterly loss that HPCL has ever incurred.
BPCL too posted a loss of Rs.6148 crore v/s net profit of Rs.2560 crore on a 12% rise in revenue at Rs.1,38,424 crore.
Both the companies posted losses on account of the freeze on petrol and diesel price revision despite rising crude price ahead of assembly elections in states like Uttar Pradesh. The freeze was removed in March and prices were hiked Rs.10/litre but once again another freeze came into place in April. The current freeze on petrol and diesel prices, excluding the reduction due to a cut in excise duty, is now 122 days long.
Analysts have put out reports saying that IOC, BPCL and HPCL sold petrol and diesel at a loss of Rs 12-14 per litre, fully offsetting all gains made on higher refining margins.