HPCL Secures Crude Oil Supplies for Two Months Amid Market Uncertainty
Hindustan Petroleum Corp Secures Crude Oil for Two Months, Looks to Secure July Supplies
State-run Hindustan Petroleum Corp has announced that it has secured crude oil for two months, with the company actively seeking to secure oil supplies for the month of July. According to Chairman Vikas Kaushal, the company's crude oil purchases have become more expensive due to the ongoing West Asia conflict, which has affected India's energy supplies.
The company expects the first quarter of fiscal year 2027 (Q1FY27) to be "very tough" on the backdrop of the conflict. Kaushal noted that geopolitical uncertainty is prevalent, crude prices have increased, product availability has been challenging, and the company's foreign exchange has faced difficulties. In response, the company has shifted its focus to ensuring that supplies are met.
Prior to the conflict, Hindustan Petroleum Corp was securing half of its crude oil requirements from term contracts and half from the spot market. However, the company is now relying mostly on spot cargoes. To mitigate supply chain disruptions, the company has increased its purchases of oil from Russia, the US, and Venezuela, as well as LPG supplies from the US. Additionally, the company has noted that crude supply remains available from South American and African countries.
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The company's refineries have also maintained a stable product inventory. The Vizag refinery has a product inventory of 45-50 days, while the Mumbai refinery has 35-40 days of inventory.
In terms of financial performance, Hindustan Petroleum Corp recorded a consolidated net profit of Rs 6,065.26 crore in the March quarter of fiscal 2025-26, representing a 77 percent increase from the year-ago period. This improvement was driven by better refining margins.
The company has also announced a final dividend of Rs 19.25 per share, subject to approval by the members of the corporation. This is in addition to the interim dividend of Rs 5 paid during the year.
Comparison of Hindustan Petroleum Corp's Dividends
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| Fiscal Year | Final Dividend per Share | Interim Dividend per Share |
|---|---|---|
| 2025-26 | Rs 19.25 | Rs 5 |
| 2024-25 | Rs 17.50 | Rs 4 |
| 2023-24 | Rs 15.00 | Rs 3 |
Note: The dividend amounts are subject to approval by the members of the corporation.
Investor Takeaway
Investors should be cautious of the potential impact of geopolitical uncertainty on energy supplies and crude oil prices.
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